ISLAMABAD: Korean Ambassador Suh Sungpyo has urged the government to include 470MW Lower Spat Gap Hydropower Project (LSG HPP) in Indicative Generation Capacity Expansion Plan (IGCEP) 2022-31 or grant it one-year extension in Letter of Support (LoS).

In a letter to Minister for Power Khurram Dastgir Khan, a copy of which has also been sent to chairman of the National Electric Power Regulatory Authority (NEPRA), the Korean ambassador noted that the 470MW Lower Spat Gap Hydropower Project is being executed by Korea Hydro and Nuclear Power Company Ltd (KHNP) in Khyber Pakhtunkhwa (KP) under Public-Private Partnership (PPP) model with KHNP’s investment commitment of $1.1 billion. The KHNP is the largest state-owned electricity generation company in the Republic of Korea, with a total generation output of over 28,500 MW.

Recently, Chairman NEPRA, Tauseef H Farooqi attended a function organised by Korean Embassy with respect to the energy sector, where in it was disclosed that the Korea will gift a modern solar power plant to Pakistan to mark forty years of friendly and prosperous diplomatic relations. The project would be established by the Economic Development Cooperation Fund (EDCFG) of South Korea for promoting renewable energy.

Korean ambassador argued that for the smooth execution of LGS HPP, it is quintessential that the project is included in the Indicative Generation Capacity Expansion Plan, adding that its inclusion will pave the way for the KHNP to attain the initial/ feasibility tariff for the project and enable it to expedite project’s execution.

Alternatively, if inclusion in IGCEP 2022 is not feasible then a one-year relaxation period be granted to the project under the Finance Act, 2022 so that the financial viability of LSG HPP can be maintained.

According to the Finance Act, 2022, which is valid till the last day of June 2023, sponsors who are unable to achieve the Letter of Support (LoS) within this period will have to forgo Income Tax Exemption, he added.

The ambassador further claimed that LSG HPP is one of the largest investment projects currently being undertaken by a Korean company in Pakistan, adding that it is a collective desire that the project is successfully accomplished and is able to contribute towards enhancing the overall electricity production in Pakistan.

Copyright Business Recorder, 2022