Korea South-East Power Co. Ltd has appealed directly to Prime Minister Shehbaz Sharif regarding what the state-owned energy firm terms unfair regulatory delays affecting its $1 billion hydropower investment in Pakistan. According to a letter sent by CEO Kim Min Young, the subsidiary of Korea Electric Power Corporation has faced a multi-year blockage at the final stage of regulatory approval for two run-of-the-river projects on the Swat River.
### Regulatory Deadlocks Stall Swat River Hydropower Projects
The Korean energy company has spent approximately $25 million on the ground developing two projects in Khyber Pakhtunkhwa since 2016, according to company records. The 229MW Asrit Kedam project and the 238MW Kalam Asrit project represent a combined generation capacity of 467 megawatts.
Kim stated in the correspondence that the firm signed a Memorandum of Understanding with the Government of Khyber Pakhtunkhwa in 2017 and subsequently secured letters of intent from the Pakhtunkhwa Energy Development Board. Furthermore, the company maintained active performance guarantees, extending them through June 2027.
Both projects completed feasibility studies and secured inclusion in the official Indicative Generation Capacity Expansion Plan for 2022-2031. The National Electric Power Regulatory Authority issued a generation licence for the developments in June 2023.
### Tariff Determination Delays Exceed Statutory Limits
Despite completing licensing requirements, the tariff determination process stalled indefinitely. According to company disclosures, the regulator admitted the tariff petition in June 2023 and conducted a public hearing on July 17, 2023.
Under Rule 16 of the Nepra Tariff Standards and Procedure Rules 1998, authorities are mandated to issue tariff determinations within four to six months. However, three years have elapsed since the initial public hearing without a final determination.
The firm escalated the matter to the Nepra Appellate Tribunal, which issued a directive in July 2024 instructing the regulator to decide the tariff issue. According to corporate filings, that directive remains unimplemented after nearly two years.
### Draft Generation Plan Revisions Threaten Investment
The regulatory impasse reached a critical juncture when the draft Indicative Generation Capacity Expansion Plan for 2025-2035 omitted both Swat River projects. The company submitted formal oral and written objections during public hearings and filed detailed post-hearing comments in May.
A Nepra spokesperson stated that the projects were not optimized within the updated capacity plan and therefore remained pending for consideration.
To address concerns regarding surplus power capacity in Pakistan, KOEN offered to align the commercial operation dates of both hydropower stations with the country’s actual power demand timeline. The firm is asking the prime minister to ensure tariff determination and to maintain oversight under the Power Generation Policy 2015, the original framework utilized for the investment.