102MW Gulpur Hydropower Project: NEPRA approves 30-year tariff of 9.3843 cents/kWh

ISLAMABAD: The National Electric Power Regulatory Authority (NEPRA) has approved a levelised tariff of US cents 9.3843 per kWh for a period of 30 years for the 102 MW run-of-the-river Gulpur Hydropower Project, being established by M/s Mira Power Limited (MPL).

According to NEPRA’s determination, the generation tariff will be Rs 17.3751 per kWh for the first 12 years and Rs 8.2686 per kWh for years 13 to 30, resulting in a levelised tariff of Rs 14.8507 per kWh.

The reference tariff has been calculated on the basis of a net contracted capacity of 100.98 MW and net annual energy production of 474.996 GWh.

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The tariff will remain applicable for a period of 30 years on a Build-Own-Operate-Transfer (BOOT) basis, commencing from the Commercial Operation Date (COD). Debt servicing will be completed during the first 12 years of operations.

Mira Power Limited, a subsidiary of Korea South-East Power Company (KOEN), is an Independent Power Producer (IPP) that has developed the 102 MW Gulpur Hydropower Project on River Poonch in District Muzaffarabad, Azad Jammu and Kashmir (AJ&K).

The project has been developed under the Government of Pakistan’s Power Generation Policy 2002.

KOEN holds 76 percent shareholding in the project, while DL Holdings holds 18 percent and Lotte Engineering & Construction holds 6 percent. The sponsors were issued a Letter of Intent (LoI) by the Private Power and Infrastructure Board (PPIB) on March 12, 2005.

Earlier, NEPRA, in its decision dated August 3, 2015, had approved a levelised tariff of US cents 9.0241 per kWh (equivalent to Rs 9.4617 per kWh at an exchange rate of Rs 104.85/USD), along with applicable indexation and adjustment mechanisms.

The Authority had also directed the Central Power Purchasing Agency-Guarantee (CPPA-G) to submit an amended Power Purchase Agreement (PPA) for approval.

Subsequently, MPL, through CPPA-G, filed a tariff modification petition seeking revision of NEPRA’s October 28, 2015 decision. The company argued that it was facing severe liquidity constraints as its tariff was indexed at an exchange rate of Rs 104.85/USD, whereas debt repayments were being made at significantly higher prevailing exchange rates, around Rs 150/USD. MPL also requested relief, citing that COD adjustments would be time-consuming.

In response, NEPRA, through its decision dated March 9, 2021, allowed interim modification of the EPC-stage tariff by adjusting relevant components based on an exchange rate of Rs 158.25/USD—the rate prevailing at COD (March 10, 2020).

The Authority indexed the relevant tariff components accordingly, subject to final adjustment at COD.

The project also experienced delays due to force majeure events, leading to extended construction timelines and additional cost claims, which were processed through various regulatory stages.

In an additional note, Member (Tariff and Finance) Amina Ahmed observed that the COD adjustment request, filed in March 2022, had been inordinately delayed for over three years and should have been decided much earlier.

She expressed disagreement with the majority decision regarding the disallowance of exchange rate variation on the entire engineering and construction (EPC) cost. She noted that NEPRA’s reasoning—that such costs are incurred locally and should therefore be paid in Pakistani Rupees without exchange rate indexation—was inconsistent with past practices.

“I do not agree with this general basis for disallowing exchange rate variations on EPC costs, as it contradicts NEPRA’s own precedents, where such variations have been allowed in several tariff cases across different technologies,” she stated.

However, she agreed with the treatment of civil works costs being maintained in PKR, based on the specific mechanism approved in the reference tariff, which provides for PKR-based escalation.

She further pointed out that the electrical and mechanical (E&M) component of the EPC cost, amounting to $9.55 million, had not been allowed exchange rate adjustment. In her view, this portion should qualify for indexation because it was incurred in foreign currency, was not denominated in PKR in the reference tariff, and had not been included in the approved escalation mechanism.

She cited the precedent of the Laraib Energy project, where similar onshore EPC costs not covered under escalation were treated as USD-based and allowed exchange rate variation.

“There is no justifiable reason to deny Mira Power exchange rate variation on this component,” she concluded.

Copyright Business Recorder, 2026