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Business Recorder
14-07-2025
- Business
- Business Recorder
KP asks centre to retain its two HPPs on IGCEP 2025-35
PESHAWAR: The KP government has asked the federal government to retain its two public sector energy projects i.e. Madyan Hydropower Project and Gabral Kalam HPP on Indicative Generation Capacity Expansion Plan (IGCEP 2025-35) prepared by the ISMO (System Operator). For this purpose, the Special Assistant to KP Government on Energy and Power Department, Tariq Saddozai has written a formal letter to the Federal Minister for Energy and Power, Sardar Owais Ahmad Leghari. The content of the letter said that the provincial government has expressed surprise over the unilateral altering of the criteria for 'committed projects' in IGCEP 2025-35 that has resulted in the exclusion of the KP government's projects. It said that as per the National Energy (NE) Plan, all projects declared committed under approved IGCEP 2021 shall be included as committed projects in subsequent iterations of the IGCEP. Therefore, the exclusion of the said projects is clearly in contravention of the NE Plan approved by the federal government pursuant to the NEPRA Act, 1997. It said that the revised criteria introduced by System Operator is contrary to the earlier prescribed approved criteria. The system operator cannot revise the criteria for committed projects during the currency of the current NE Plan. Furthermore, the retrospective application of such revised criteria is also contrary to the law as it amounts to changing the goal post during the game. Once a project is recognized and declared as committed project, it cannot be revaluated afresh through subsequent iterations and the revised criteria shall be applicable to the new projects that were not earlier present, not iterated projects or where the committed projects have been abandoned. Even the delays in the committed projects do not justify their exclusion rather the timelines for the commercial operations date are to be adjusted. It has further stated that the KP government projects have already demonstrated considerable physical and financial progress after attaining the status of 'Committed Projects' pursuant to the earlier IGCEPs. In consequence thereof, the KP government had also secured Generation Licenses from NEPRA, creating a vested right. Moreover, the provincial government also understand that once the project are declared committed, the criteria of least-cost, cannot be applied retrospectively to their further processing in their development cycle. Notwithstanding, the KP projects despite achievement of the status of 'Committed Projects' have been subjected to least-costs evaluation under the draft IGCEP 2025-35, which is contrary to the constitutional, statutory and regulatory framework. It has also highlighted that public sector projects of the federal government, previously declared as committed, namely Mohmand Dam, Dasu, Tarbela Extension-5 etc, continue to remain as committed in the draft IGCEP 2025-35. In stark contrast, the government of Khyber Pakhtunkhwa's 'Committed Projects' namely Madyan and Gabral-Kalam HPPs, have been excluded, which demonstrates discriminatory approach of the system operator which should accord equal treatment to the federal and provincial power projects developed through the public funds. On one hand the KP government projects have been approved by the federal government through the ECNEC of the Planning Commission and on the other hand, the system operator which is owned and controlled by the federal government is not recognizing the approval granted by the federal government. It further stated that the provincial government has secured concessional financing from the multilateral lender, that is, the World Bank through the Economic Affairs Division of the federal government, through multilateral lending framework, which is signed and guaranteed by the federal government in respect of loans extended by the World Bank to the province. The exclusion of KP projects would undermine this window of multilateral lending and would expose the government of Pakistan to the cancellation of loan/ lending and recovery of the financing charges, winding up costs, breakage costs, commitment fees etc. The exclusion will further prevent future lending to development projects in general and power projects in particular in KP beside giving highly negative signal to the current and potential investors in the province. Thus, the system operator being an entity of the federal government is failing to recognize the financing arrangement, for the development of the power projects, which financing has been incepted, financing and closed with the approval of the federal government. In light of the mentioned facts, grounds and circumstances, the KP government has requested the federal government to retain the projects of Madyan HPP and Gabral Kalam HPP as 'Committed Projects' in the IGCEP 2025-35; not allowing the System Operator to alter, modify, deviate or revise the criteria for inclusion of projects in the IGCEP in contravention of NE Plan, those approved unanimously by the Council of Common Interests vide its decision No. 2(8)/2021 CCI (48) dated September 13, 2021. Copyright Business Recorder, 2025
Business Recorder
23-04-2025
- Business
- Business Recorder
KE asks Power Div for consultation on NEP
ISLAMABAD: The Power Division's alleged apathy with respect to consultation process on the National Electricity Plan (NEP) has irritated K-Electric (KE), well informed sources told Business Recorder. In a letter to Secretary Power, KE's Chief Regulatory Affairs Imran Qureshi referred to KE's letter of January 15, 2025 regarding the NEP 2023-2027 and eligibility criteria (Electric Power Supplier Licenses) Rules 2023 ('Supplier Rules') notified by the federal government along with earlier correspondence on this matter wherein the power utility company submitted its comments to the Power Division for consideration and incorporation of the same accordingly. According to the power utility company, considering the significance of the matter and possible implications on KE and its consumers, it also requested for a one-to-one consultative session to discuss KE's comments, as well as, certain recommendations on the notified NEP including the implementation timelines for certain strategic directives and on the supplier rules, as well. However, despite continuous correspondence from KE, the response from Power Division is still awaited. KE explains power generation cost in Dec KE, in its letter of April 8, 2204 reiterated that a thorough consultation with all stakeholders is critical for effective implementation of the NE Plan and supplier rules, as well as, for the sustainability of the sector, including the proposed transition towards opening up of the market under the Competitive Trading Bilateral Contracts Market (CTBCM) framework. 'KE acknowledges and highly appreciates the ongoing sector reforms, and we are confident that a well-considered and collaborative transition, finalised in consultation with stakeholders, will not only serve the best interests of consumers but also send a positive signal to both existing and prospective investors in Pakistan,' Qureshi said adding that support and understanding of Secretary Power in this matter is crucial. He also assured engagement in constructive dialogue to ensure a smooth and beneficial transition for all stakeholders involved. Earlier, in his letter to Secretary Power, Chief Executive Officer (CEO) Syed Moonis Abdullah Alvi stated that KE had sent its comments on the NEP which need to be considered for incorporation in the plan accordingly. 'Considering the significance of the matter and possible implications on KE and its consumers, KE also requested for a one-to-one consultative session to discuss KE'S comments, as well as, certain recommendations on the notified NE Plan including the implementation timelines for certain strategic directives and on the supplier rules, as well. However, despite continuous correspondence from KE it is most respectfully submitted that response is awaited in this regard,' he added. Copyright Business Recorder, 2025
