KP govt urges SIFC: Projects backed by Korean state-owned co must be added to IGCEP iteration
ISLAMABAD: The Khyber Pakhtunkhwa government has approached the Special Investment Facilitation Council (SIFC), urging it to ensure that proposed hydropower projects — backed by a Korean state-owned company — are included in the upcoming iteration of the Integrated Generation Capacity Expansion Plan (IGCEP) 2025–35.
In a letter addressed to the Secretary of SIFC, Secretary Power Division, and the Chairman of Nepra, Shehryar Mehmood, Chief of the Public-Private Partnership Unit in KP's Planning & Development Department, emphasized the strategic importance of the 470 MW Lower Spat Gah Hydropower Project. The project, developed in partnership with Korea Hydro & Nuclear Power Co. Ltd. (KHNP), was initiated under the KP Hydropower Policy 2016 and aligned with the Federal Government's Power Generation Policy 2015.
KHNP conducted a bankable feasibility study through internationally reputed consultants, received approval from PEDO's Panel of Experts (PoEs), and secured various regulatory NOCs from agencies including the Environmental Protection Agency, Forest Department, and IRSA. The company also established Special Purpose Companies (SPCs), deployed Korean expatriate staff, and applied for a generation license and feasibility-stage tariff from NEPRA.
However, NEPRA returned both applications, citing that the project was not included in the currently approved IGCEP 2021–31. Despite NEPRA's earlier direction to the National Transmission & Despatch Company (NTDC) to consider the Lower Spat Gah HPP in the next IGCEP iteration, it was not included.
The KP government noted that, despite SIFC's efforts to coordinate with the Power Division and NEPRA over the past several months, progress was hindered by investigations initiated by committees within the Power Division. Compounding the issue, the forthcoming IGCEP 2024–25 is reportedly being developed based on a low-demand scenario, and only public sector federal projects (WAPDA, GENCOs, PAEC) are being listed as 'committed,' sidelining private and provincial ventures regardless of their cost-effectiveness.
'The current approach fails to apply the least-cost planning principle and sets unrealistic COD targets for federal projects without proper due diligence,' stated the KP government in the letter.
The provincial government underscored the strategic and economic value of the Lower Spat Gah project, which represents over $1 billion in foreign direct investment. The project, designed to generate energy below the national basket price, promises no additional burden on consumers and is in line with seasonal energy demand. Its clean, renewable output would not add to the country's idle generation capacity and aligns with national goals under the Sustainable Development Goals (SDGs) and Nationally Determined Contributions (NDCs).
Given the project's remote, flood-prone location, the KP government argues that such investment would catalyze infrastructure development, create jobs, and contribute to energy security by serving as a peaking power plant that complements intermittent solar and wind sources. Moreover, retiring expensive thermal power plants in the coming years increases the urgency for base-load renewable energy options.
KP officials also highlighted that the sponsors have invested considerable time, effort, and capital since 2018 under prevailing policy frameworks. Abruptly shelving the project at this advanced stage—without adherence to policy commitments—would send a negative signal to international investors and damage Pakistan's credibility.
The KP government has formally requested SIFC's intervention to ensure that this foreign direct investment project is considered under applicable federal policies and included in the new IGCEP. 'This will not only benefit our province,' the letter concludes, 'but also significantly contribute to Pakistan's energy landscape.'
Copyright Business Recorder, 2025
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