ISLAMABAD: M/s Korea Southeast Power Co., Ltd. (KOEN), a South Korean power sector company has expressed its resentment on government entities, including National Electric Power Regulatory Authority (Nepra), for reportedly jeopardizing their two hydropower projects.
The leading state-owned electricity generation company, operating around 10,000 MW with asset base of $ 15 billion in South Korea moved further to bring Foreign Direct Investment (FDI) of around $ 1.2 billion for the development of 229-MW AsritKedam Hydropower project and 238-Kalam Asrit hydropower project on BOOT basis located in Swat district of Khyber Pakhtunkhwa after the successful commissioning of the 102-MW Gulpur Hydropower Project in 2015.
Energy sector: $3bn Korean investment in jeopardy: BoI
The company’s Branch Manager, Yoon An Sang, in a letter to Secretary Power, Rashid Mahmood Langrial has complained that despite numerous efforts and utmost seriousness of KOEN to develop the projects on fast track basis, the fate of its two projects hangs in a balance.
The Korean company has sought intervention of Secretary Power for the issuance of Tripartite Letter of Support (TLOS) under Power Generation Policy 2015 by PPIB by June 30, 2023 to enable the projects to meet the deadlines to achieve COD by July 2029 in IGCEP-2022-31 and to avail the income tax exemption which is expiring on the said date.
The company has claimed that for the issuance of TLOS, Nepra is required to approve the feasibility stage tariff of the projects by end of May 2023 which is pending since nine months on account of various reasons with no fault of the sponsors.
The Letter of Intent (LoI) for the 229-MW AsritKedam hydropower project and 238-MW KalamAsrit hydropower project was issued on June 23, 2021 and April 24, 2018, respectively.
The feasibility study of the projects was approved by Panel of Experts (PoEs) in the second quarter of 2022 followed that (in June 2022) both projects approached Nepra for grant of generation licences and feasibility stage tariffs. Both projects are also optimized in IGCEP-2022-31 with scheduled COD in July 2029.
With determination of tariffs, the projects would be able to obtain the Tripartite Letter of Support from PPIB to avail the income tax exemption available to independent power producers which is expiring on June 30, 2023 and to meet the deadlines of COD provided IGCEP 2022-31.
With regard to processing of generation licences, NEPRA informed the company that the processing shall be made once the IGCEP-2022-31 is approved by Nepra; this took approximately eight months and approved on February 2, 2023. Subsequently, the project companies were informed that due to the promulgation of National Electric Power Regulatory Authority (Electric Power Procurement)
Regulations, 2022 (the “2022 Regulations”) in December 2022 the matter is still pending before Nepra due to lack of clarity on the processing of legacy power sector projects under 2022 Regulations.
“Inordinate delays, firstly on account of approval of IGCEP-2022-31 by 8-9 months and now due to lack of clarity in 2022 Regulations on Nepra’s part are putting it efforts, its investments, and much need Foreign Direct Investment for Pakistan in jeopardy and have shaken sponsors to the core,” said the Branch Manager.
Copyright Business Recorder, 2023
Comments