ISLAMABAD: Kohala Hydro Company (Pvt) Ltd (KHCL) has termed the exclusion of its 1,124 MW hydropower project from the Indicative Generation Capacity Expansion Plan (IGCEP) 2025–35 a grave violation of the decisions of the Council of Common Interests (CCI) and other relevant forums.
The Private Power and Infrastructure Board (PPIB) recently conveyed the government’s decision to the management of KHCL.
The project had earlier been declared a committed project under the eligibility criteria prescribed in IGCEP 2021–30 and IGCEP 2022–31 — both duly approved by the National Electric Power Regulatory Authority (NEPRA).
KHCL seeks LoS extension for $2.5bn Kohala hydropower project till Sept 2027
In a letter to PPIB Managing Director Shah Jahan Mirza, KHCL Chief Executive Officer Liu Yonggang stated that the project remains a committed project under the approved IGCEPs as of August 1, 2025. He argued that the PPIB Board’s recent decision to recall the previously granted extension in the Financial Close (FC) date, approved in its 144th meeting, was legally flawed.
According to the company, the 1,124 MW Kohala Hydropower Project has been wrongly shown as a candidate project in the draft IGCEP 2025–35 submitted by the Independent System and Market Operator (ISMO) to NEPRA. Since the draft plan has yet to be approved, KHCL contends that its project must continue to be treated as committed until NEPRA grants approval.
KHCL maintained that certain observations made in the MD PPIB’s letter are inconsistent with the governing legal and policy framework. The company emphasized the need for “consistency, mutual alignment, and smooth progression of the project in the spirit of cooperation and good faith” as envisaged under Article XVII of the Government of Pakistan Implementation Agreement.
The company noted that the project is being developed strictly under the Power Policy 2002 and related agreements. The policy categorizes projects into short, medium, and long-term plans, based on gestation and expected commissioning dates, and does not make a project’s implementation conditional on its inclusion in the IGCEP.
KHCL argued that the IGCEP is a technical planning tool prepared by ISMO for system optimization and cannot override express rights granted under the Power Policy 2002 or contractual agreements. The IGCEP 2025–35, it added, is only an indicative development plan and does not determine procurement targets, tariff decisions, or liabilities.
Hence, KHCL said, the IGCEP 2025–35 cannot override approvals and policies of the federal government, including the Power Policy 2002, AJ&K Power Policy 2002, the government-to-government (G2G) CPEC framework, or the Bilateral Investment Treaty between Pakistan and China.
The company stressed that the committed project status of Kohala is reaffirmed under the National Electricity Plan (NE Plan) 2023–27, notified on September 13, 2023. The plan states that all projects declared committed in IGCEP 2021, pursuant to the CCI’s decision of September 13, 2021, must continue to be treated as such.
KHCL further argued that Nepra, under Section 14A(5) of the NEPRA Act 1997, is obligated to act in conformity with the National Electricity Policy 2021 and NE Plan 2023–27. Therefore, any departure from these by ISMO or the application of unapproved criteria is “unlawful and contrary to the statutory framework.”
The company also rejected the new definition of “committed projects” in IGCEP 2025–35, which requires private sector projects to achieve both financial close and at least 10% physical and financial progress.
KHCL called this criterion “irrational and procedurally improper,” arguing that financial close cannot be achieved before inclusion in the IGCEP, as lenders require that inclusion as a precondition for financing. “It creates an egg-or-chicken paradox,” the letter said, adding that such retrospective changes violate legal principles of non-retroactivity and undermine investor confidence.
The company warned that changing eligibility rules midstream undermines policy, regulatory, and contractual certainty — discouraging investors, eroding lender trust, and damaging Pakistan’s planning credibility. Once recognized as a committed project by competent federal forums with international financing underway, its status cannot lawfully be withdrawn through administrative reinterpretation, KHCL maintained.
In light of the above, KHCL submitted the following requests: (i) PPIB Board review and reconsider its October 9, 2025 decision; (ii) affirm that the 1,124 MW Kohala project continues to be processed under the Power Policy 2002, AJ&K Power Policy 2002, G2G CPEC Agreement, and related project documents; (iii) restore the extension in the term of the Letter of Support approved in the 144th PPIB Board meeting; (iv) retain the project as committed in IGCEP 2025–35; and (v) direct ISMO not to alter or revise IGCEP inclusion criteria without approval from the CCI, as required under Article 154(7) of the Constitution and Section 7 of the NEPRA Act.
“ISMO, as a federal entity, should not undermine approvals already granted by the CCI, ECC, CPEC Authority, Government of AJ&K, PPIB, and NEPRA. It called for equal treatment of provincial and federal projects to preserve constitutional equity,” said CEO KHCL.
Copyright Business Recorder, 2025
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