M/s KOEN the state-owned company and subsidiary of Korea Electric Power Corporation (Kepco) has written a detailed letter to Chairman NEPRA stating the confusion his company is facing for 229MW Asrit-Kedam Hydropower project and 238MW Kalam-Asrit Hydropower project in district Swat with cumulative investment of $1.0 billion
The company is working on fast track basis to complete the construction of the two projects and has already invested $20 million. Now NEPRA is not entertaining the projects processing until these are included as “committed projects” in the IGCEP. Moreover it is further being said that corporate tax will be applied to projects which are unable to get LoS by June 30, 2023.
In the letter to NEPRA, the company has explained that a typical run of river hydropower project requires three years to reach the LoS stage and 5-6 years are required for construction. Therefore, no sponsor will invest huge amount in the feasibility study and will wait for 8-9 years without getting the assurance that either the project will qualify in the IGCEP as committed project or at least be given a fair chance to compete with other hydropower projects.
Moreover, according to the company, unfortunately, IGCEP is not clear about the “least cost criteria”. If the “least cost” principle is applied theoretically without considering the matters of grid stability, appropriate energy mix, base load, peaking power, and economic benefits then only solar projects should qualify in the IGCEP being least cost option. Definitely, this is not the intent of the Government or IGCEP. It would be grossly unfair to compare capital intensive hydropower with wind and solar projects.
