NEPRA Approves 30-Year Tariff for 102MW Gulpur Hydropower Project

The National Electric Power Regulatory Authority (NEPRA) has approved a 30-year levelised tariff of 9.3843 US cents per kWh for the 102MW run-of-the-river Gulpur Hydropower Project, developed by Mira Power Limited (MPL).

 

Under the approved structure, the project will receive Rs17.3751 per kWh during its first 12 years of operation, followed by Rs8.2686 per kWh from years 13 to 30. This results in a levelised tariff of Rs14.8507 per kWh over the full 30-year period.

 

The tariff is based on a net contracted capacity of 100.98MW and estimated annual energy generation of 474.996 GWh. It will apply under a Build-Own-Operate-Transfer (BOOT) arrangement from the project’s Commercial Operation Date, with debt servicing scheduled to conclude within the first 12 years.

 

Mira Power, an independent power producer and subsidiary of Korea South-East Power Company (KOEN), developed the project on the Poonch River in Muzaffarabad, Azad Jammu and Kashmir, under Pakistan’s Power Generation Policy 2002.

 

KOEN owns 76% of Mira Power, while DL Holdings holds 18% and Lotte Engineering & Construction owns 6%. The project sponsors received their Letter of Intent from the Private Power and Infrastructure Board in March 2005.

 

NEPRA had initially approved a levelised tariff of 9.0241 US cents per kWh in August 2015. However, the project later faced financial and construction challenges, including exchange-rate pressures, delays and force majeure events.

 

Mira Power subsequently sought tariff modifications, citing liquidity constraints caused by the depreciation of the rupee. Its original tariff had been indexed to an exchange rate of Rs104.85 per dollar, while debt repayments were being made at significantly higher exchange rates.

 

In March 2021, NEPRA allowed an interim adjustment to the EPC-stage tariff using an exchange rate of Rs158.25 per dollar, which was the rate prevailing when the project achieved COD in March 2020.

 

The project also experienced construction delays linked to force majeure events, resulting in additional costs and further regulatory proceedings.

 

In a dissenting note, NEPRA Member Tariff and Finance Amina Ahmed criticised the prolonged delay in deciding the project’s COD adjustment request. She also disagreed with the authority’s decision to reject exchange-rate adjustments for the entire EPC cost.

 

Ahmed argued that NEPRA had previously allowed similar exchange-rate adjustments in other tariff cases and said the $9.55 million electrical and mechanical EPC component should qualify for indexation because it was incurred in foreign currency.

 

She also referred to the Laraib Energy project as a precedent for allowing exchange-rate variation on comparable EPC costs, concluding that there was no sufficient basis to deny Mira Power a similar adjustment.