IGCEP 2025-35: PD obtains legal opinion in support of proposed draft

ISLAMABAD: The Power Division has reportedly obtained legal opinion in support of the proposed draft of the Indicative Generation Capacity Expansion Plan (IGCEP) 2025-35, anticipating that NEPRA may object to the exclusion of certain projects that were classified as “committed” in the current IGCEP 2023-27, sources told Business Recorder.

NEPRA has uploaded the draft IGCEP 2025-35 on its website to invite stakeholder comments ahead of a public hearing on the document.

According to Clause 5(c) of the National Electricity Plan (NE Plan), projects declared as committed in IGCEP 2021 (pursuant to a decision by the Council of Common Interests, or CCI) must be included as committed in each subsequent IGCEP.

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However, the new IGCEP 2025-35, approved by the federal government, omits some of those earlier committed projects, citing reasons such as (i) significant demand reduction; (ii) insufficient project progress or milestones; and (iii) negative implications for affordability, financial viability, and system efficiency.

Sources revealed that before submitting the IGCEP to NEPRA, the Power Division obtained a legal opinion to ensure compliance with the applicable legal, regulatory, and policy framework.

“There were concerns that NEPRA might return the IGCEP with the observation that all committed projects from IGCEP 2021 must be included, as per the approved NE Plan,” a source said.

According to sources, a demand reduction of 35,296 GWh is projected for FY 2024-25, while a total decline of 66,787 GWh is forecast by 2031. The financial impact in terms of Net Present Value (NPV) is estimated at $16.89 billion, and consumer prices may increase by Rs 4.92 per kWh.

The legal opinion, sought by the Integrated System and Market Operator (ISMO), states that under the prevailing legal, regulatory, and policy frameworks (including IGCEP 2021 and 2022 iterations), the IGCEP is indicative in nature and not legally binding.

It further asserts that no legal rights or entitlements arise from a project’s classification in the IGCEP, as each annual update is based on evolving factors including demand forecasts, market conditions, and project development status.

Sources noted that in the 2022 IGCEP iteration, NEPRA itself removed 17 projects it had previously approved as committed in an earlier IGCEP version.

“The NE Plan and NE Policy must be interpreted harmoniously and aligned with IGCEP development principles. They should not be read in a way that undermines key policy objectives like sustainability, affordability, financial viability, and cost-effectiveness, as established by the CCI,” the sources added.

Copyright Business Recorder, 2025