The National Electric Power Regulatory Authority has approved a levelised tariff of US cents 9.3843 per kWh for a period of 30 years for the 102 MW run-of-the-river Gulpur Hydropower Project, being developed by M/s Mira Power Limited.
According to NEPRA’s determination, the generation tariff will stand at Rs17.3751 per kWh for the first 12 years and Rs8.2686 per kWh for years 13 through 30, resulting in a levelised tariff of Rs14.8507 per kWh. The reference tariff was calculated based on a net contracted capacity of 100.98 MW and net annual energy production of 474.996 GWh, and will apply for 30 years on a Build-Own-Operate-Transfer basis, commencing from the Commercial Operation Date, with debt servicing to be completed during the first 12 years.
Mira Power Limited, a subsidiary of Korea South-East Power Company, is the Independent Power Producer behind the 102 MW Gulpur project on River Poonch in District Muzaffarabad, Azad Jammu and Kashmir, developed under the Government of Pakistan’s Power Generation Policy 2002. KOEN holds 76% shareholding in the project, with DL Holdings holding 18% and Lotte Engineering & Construction holding 6%. The sponsors received a Letter of Intent from the Private Power and Infrastructure Board on March 12, 2005.
NEPRA had earlier approved a levelised tariff of US cents 9.0241 per kWh, equivalent to Rs9.4617 per kWh at an exchange rate of Rs104.85/USD, in a decision dated August 3, 2015, along with applicable indexation and adjustment mechanisms, and had directed the Central Power Purchasing Agency-Guarantee to submit an amended Power Purchase Agreement for approval.
MPL subsequently filed a tariff modification petition through CPPA-G, seeking revision of NEPRA’s October 28, 2015 decision. The company argued it faced severe liquidity constraints, since its tariff remained indexed at Rs104.85/USD while debt repayments were being made at significantly higher prevailing exchange rates of around Rs150/USD, and sought relief given that COD adjustments would be time-consuming.
In response, NEPRA’s March 9, 2021 decision allowed an interim modification of the EPC-stage tariff, adjusting relevant components based on an exchange rate of Rs158.25/USD, the rate prevailing at COD on March 10, 2020, with the Authority indexing tariff components accordingly, subject to final adjustment at COD. The project also faced delays due to force majeure events, leading to extended construction timelines and additional cost claims that were processed through various regulatory stages.
In an additional note, Member (Tariff and Finance) Amina Ahmed observed that the COD adjustment request, filed in March 2022, had been inordinately delayed for over three years and should have been decided much earlier. She expressed disagreement with the majority decision to disallow exchange rate variation on the entire engineering and construction cost, noting that NEPRA’s reasoning, that such costs are incurred locally and should be paid in Pakistani Rupees without exchange rate indexation, was inconsistent with the regulator’s own past practices. “I do not agree with this general basis for disallowing exchange rate variations on EPC costs, as it contradicts NEPRA’s own precedents, where such variations have been allowed in several tariff cases across different technologies,” she stated. She did, however, agree with maintaining civil works costs in PKR, based on the specific mechanism approved in the reference tariff providing for PKR-based escalation.
She further noted that the electrical and mechanical component of the EPC cost, amounting to $9.55 million, had not been allowed exchange rate adjustment, arguing this portion should qualify for indexation since it was incurred in foreign currency, was not denominated in PKR in the reference tariff, and had not been included in the approved escalation mechanism.
