A decade-long effort by a South Korean state-owned energy company to invest $1 billion in two hydropower projects on the Swat River has reached a critical juncture, with the firm alleging regulatory stonewalling and appealing directly to Prime Minister Shehbaz Sharif for intervention. In a letter marked by frustration, Korea South-East Power Co. Ltd (KOEN) CEO Kim Min Young warned that the projects—already approved in previous national energy plans—could be stranded indefinitely if a new generation capacity plan excludes them. Main Developments KOEN, a subsidiary of Korea Electric Power Corporation (Kepco), has been developing the 229MW Asrit Kedam and 238MW Kalam Asrit run-of-the-river hydropower projects on the Swat River since 2016. The combined investment totals approximately $1 billion, with the firm already spending about $25 million on feasibility and preparatory work. The company met every requirement under the government's framework, including signing a Memorandum of Understanding with the Khyber Pakhtunkhwa government in 2017, obtaining letters of intent from the Pakhtunkhwa Energy Development Board (PEDO), and securing a generation licence from the National Electric Power Regulatory Authority (Nepra) in June 2023. Performance guarantees have been extended to June 2027. Read also: 3 Killed in Balochistan: Judge Targeted in Judicial Attack Despite meeting these benchmarks, the tariff determination for the projects has never materialized. Nepra admitted the tariff petition in June 2023 and held a public hearing on July 17, 2023. Under Rule 16 of the Nepra Tariff (Standards and Procedure) Rules 1998, a determination was due within four to six months. "Three years have now passed since that hearing, and the tariff has still not been determined," the letter stated. In June 2024, the company appealed to the Nepra Appellate Tribunal, which on July 23, 2024, directed Nepra to decide the tariff matter. KOEN noted that direction "remains unimplemented after nearly two years." When the draft Indicative Generation Capacity Expansion Plan (IGCEP) 2025-35 removed the projects, the company lodged objections and filed detailed post-hearing comments in May. A Nepra spokesperson told the press that the project was not "optimised" in the IGCEP and was therefore "pending for consideration." Background KOEN is a state-owned Korean firm that operates thermal power stations, pumped-storage power plants, and combined cycle power plants. Both Swat River projects were included in the approved IGCEP 2022-31, providing a basis for the company's investment in good faith under the Power Generation Policy 2015. Pakistan and South Korea agreed in May to advance negotiations on a Comprehensive Economic Partnership Agreement (CEPA) and to enhance investment cooperation. That understanding was reached during a virtual meeting between Commerce Minister Jam Kamal Khan and South Korean Trade Minister Yeo Han-koo. Formal negotiations for the CEPA began in January 2025 after a joint declaration by Jam Kamal and South Korean Trade Minister Inkyo Cheong. South Korea's trade minister raised the KOEN projects with Pakistan's commerce minister in April, and a delegation of the firm met with the commerce minister on June 30. The company also kept Pakistan's foreign ministry informed throughout the process. "Every one of these doors received us with courtesy. Not one has produced the decision," Kim lamented. Why It Matters If the draft IGCEP 2025-35 is approved without the two projects, the $1 billion investment will be stranded indefinitely, sending a negative signal to foreign investors at a time when Pakistan is actively seeking to boost energy-sector investment. The company acknowledged the country's present surplus capacity and offered to align commercial operations with future demand, asking only for tariff certainty and continued treatment under the 2015 power policy. The case highlights broader concerns about regulatory predictability and investor protection in Pakistan's energy sector. KOEN's experience—meeting all requirements, receiving court orders that remain unimplemented, and being excluded from a national energy plan after years of work—could deter other international firms from committing to long-term energy projects in the country. What's Next The draft IGCEP 2025-35, which excludes both projects, is expected to be approved shortly. KOEN has requested Prime Minister Shehbaz Sharif's intervention to ensure tariff determination and continued project inclusion. The company stressed urgency, noting that after nearly a decade of effort, the investment is "now in real danger." No timeline has been given for a response from the prime minister's office.