Pakistan's Commerce Ministry announced on Wednesday that it is working with relevant authorities to clarify the status of a proposed $1 billion South Korean investment in two hydropower projects, following investor concerns over pending regulatory decisions and the government's evolving energy plans.
KOEN's Proposed Hydropower Projects
The investment, proposed by KOEN, a South Korean state-owned power company, involves the 229-megawatt Asrit Kedam Hydropower Project and the 238-megawatt Kalam Asrit Hydropower Project in Pakistan's northwestern Swat district. According to the Commerce Ministry, the projects have completed major feasibility, environmental, and regulatory studies. KOEN has arranged approximately $1 billion in debt and equity financing and has already spent around $25 million on project development.
However, the projects are awaiting tariff determination and inclusion in Pakistan's draft Indicative Generation Capacity Expansion Plan (IGCEP) 2025-35. The government is reassessing future electricity demand after years of surplus generation capacity and high power-sector costs.
Government Commitment to Foreign Investors
Commerce Minister Jam Kamal Khan met a KOEN delegation led by Chief Executive Officer Kim Min Young. The ministry stated: "The Minister assured the delegation that the concerned federal ministries, departments and relevant authorities would be engaged to facilitate coordinated consideration of KOEN's concerns." The statement added: "The Government remains committed to supporting credible foreign investors and would extend all possible assistance within the applicable legal, regulatory and policy framework to help bring clarity to the company's proposed projects."
KOEN has been active in Pakistan's energy sector since 2011 and completed the 102-megawatt Gulpur Hydropower Project in 2020. The two new projects were proposed under Pakistan's 2015 power generation policy.
Investor Concerns and Future Demand
KOEN informed the minister that it had completed major project milestones, including feasibility studies, environmental approvals, land-related processes, consent from the Indus River System Authority (IRSA), and grid interconnection studies. However, the company highlighted concerns over the pending tariff determination, inclusion of the projects in the draft IGCEP, and uncertainty surrounding future implementation.
Jam Kamal said Pakistan valued its economic relationship with South Korea and welcomed foreign investment in renewable energy and other priority sectors. He noted that Pakistan was reviewing its future energy requirements in light of existing generation capacity but expected new demand to emerge from green energy, industrial development, data centers, and other growing sectors.
