Latest news with #KHCL
Business Recorder
10-07-2025
- Business
- Business Recorder
KHCL slams draft IGCEP revision excluding Kohala HPP
ISLAMABAD: Chinese Company, Kohala Hydropower Company Limited (KHCL) has conveyed dismay at the recent revisions proposed in the draft IGCEP 2025-35, which retrospectively alters the criteria for 'Committed Projects,' leading to the unjustified exclusion of Kohala HPP, sources told Business Recorder. In a letter to Power Division, Chief Executive Officer (CEO), KHCL, Liu Yonggang has renewed Company's urgent request for the issuance of a formal notification for the extension of the Letter of Support (LoS) for the 1124 MW Kohala HPP, as approved by the PPIB Board during its 144thmeeting held on September 18, 2024. According to the CEO, Kohala Hydropower Company Limited (KHCL) has fulfilled all the requirements, including submission of the requisite Performance Guarantee of $ 5.62 million. He stated that Kohala HPP has been consistently recognized as a 'Committed Project' under the approved IGCEP 2021-30 and 2022-31 in accordance with the Council of Common Interests (CCI) decision of September 13, 2021. This status has been reaffirmed under the National Electricity Plan 2023-27 notified by the Federal Government, which explicitly states in Clause 5(c) that all generation projects declared committed in the IGCEP 2021 shall continue as such. KHCL seeks LoS extension for $2.5bn Kohala hydropower project till Sept 2027 However, the Company is dismayed by the recent revisions proposed in the draft IGCEP 2025-35, which retrospectively alter the criteria for 'Committed Projects,' leading to the unjustified exclusion of Kohala HPP. 'This revision undermines legally established rights and contractual obligations, and retroactively applies new benchmarks that were never part of the framework under which the Project was planned, approved, and executed,' Yonggang said adding that once a project is recognized and admitted as a committed project, it cannot be revaluated afresh through subsequent iterations and the revised criteria shall be applicable to the new projects that were not earlier present, not iterated as committed projects or where the committed projects have been abandoned. Even the delays in the committed projects do not justify their exclusion rather the timelines for the commercial operations date are to be adjusted. Notwithstanding, without any consultation with the KHCL, or evaluation of progress thereof, the NTDC has irrationally and illegally, excluded the Kohala HPP without due regard to the financial or physical progress achieved,' he continued. Moreover, the Company further understands that once the projects are declared committed, the criteria of least-cost criteria, cannot be applied retrospectively to their further processing in their development cycle. Nevertheless, the Kohala HPP despite achievement of the status of 'Committed Projects' have been subjected to least-cost evaluation under the draft IGCEP 2025-35, which is contrary to the constitutional, statutory and regulatory framework. He further claimed that Kohala HPP has satisfied all development milestones under the original criteria, including: (i) signing of all core project agreements: Implementation Agreement with the Government of Pakistan (May 6, 2021); and Tripartite Power Purchase Agreement with CPPA-G and NTDC (June 25, 2020);(ii) Water Use Agreement and AJ&K Implementation Agreement (April 23, 2020); and Tripartite Agreement between the Company, GoP, and GOAJK (June 25, 2020);(iii) procurement of a Generation Licence from NEPRA; (iv) acquisition of approximately 4,607 Kanals of land and payment of compensation in accordance with applicable laws; and (v) hiring of world reputed EPC Contractor and Owner Engineer. Chinese firm contended that Kohala HPP is a flagship CPEC Priority Energy Project and a strategic bilateral undertaking between the Governments of China and Pakistan. The Project's continued development is not only vital for sustainable energy transition but also critical for securing Pakistan's riparian rights under the Indus Waters Treaty (IWT). 'As established by the Court of Arbitration in the Kishenganga dispute, only 'existing uses' of water at the time of upstream development are protected. Any delays in progressing Kohala HPP and maintaining its committed status risk undermining Pakistan's rights over Jhelum tributary waters. The IWT, as well as customary international law, require prompt and demonstrable establishment of hydroelectric use to secure national interests,' Yonggang maintained. Copyright Business Recorder, 2025
Business Recorder
20-06-2025
- Business
- Business Recorder
KHCL seeks LoS extension for $2.5bn Kohala hydropower project till Sept 2027
ISLAMABAD: Kohala Hydro Company Limited (KHCL) has requested an extension of its Letter of Support (LoS) for the $2.5 billion, 1,124 MW run-of-the-river Kohala Hydropower Project until September 30, 2027. The extension is aimed at ensuring the continued establishment of Pakistan's existing use of water rights under the Indus Waters Treaty (IWT). In a letter to the Managing Director of the Private Power and Infrastructure Board (PPIB), KHCL CEO Liu Yonggang emphasized that the IWT, signed in 1960 between Pakistan and India with World Bank mediation, grants Pakistan rights to use the waters of the Western Rivers—Indus, Jhelum, and Chenab. Specifically, Article III (1) and (2) of the Treaty affirms Pakistan's right to utilize the waters of the Jhelum River for hydroelectric power generation. The IWT outlines the rights and obligations of both countries concerning the use of these rivers. Article III (4), read in conjunction with Annexure D, stipulates that any storage works by India on Jhelum tributaries, where Pakistan has agricultural or hydroelectric use, must be designed to avoid adversely affecting Pakistan's existing uses. Kohala Hydropower Project: Chinese co urges Pakistan govt to extend LoS KHCL argues that timely development of the 1,124 MW Kohala Hydropower Project is strategically essential for Pakistan to establish and protect its prior rights to the use of water from the Jhelum tributary. Continuation of the LoS and the Water Use Agreement with KHCL, it asserts, will help secure Pakistan's rights under the Treaty. According to the CEO, the project—being developed by a Chinese state-owned enterprise—is fully aligned with Pakistan's sovereign rights under the IWT. The letter also draws reference to the legal dispute between Pakistan and India over the Kishenganga Dam Project. In that case, the Court of Arbitration (COA) under the IWT evaluated whether India's diversion of water from one tributary to another was lawful. The COA sided with India, ruling that only those Pakistani uses existing at the time of notification were protected. Pakistan's future or planned uses, such as the Neelum-Jhelum project (which was not operational at the time), were not deemed protected. Based on this precedent, KHCL stresses that any delay in advancing the Kohala HPP could jeopardize Pakistan's ability to assert and protect its water rights, thereby opening the door for further Indian upstream interventions. The company contends that the IWT mandates Pakistan to develop infrastructure on the Western Rivers to safeguard its riparian rights, provided that existing use—whether agricultural or hydroelectric—is clearly established. International customary law, such as the 1997 UN Convention on the Law of the Non-Navigational Uses of International Watercourses, also underscores the importance of recognizing 'existing and planned uses' of water in equitable utilization. KHCL further argues that the project's inclusion under the China-Pakistan Economic Corridor (CPEC) adds vital geopolitical and economic significance. The involvement of Chinese state-owned enterprises brings international weight and enhances deterrence against any unauthorized alteration of the water regime by India. Given recent tensions, including India's unilateral and illegal suspension of the IWT and attempts to weaponize water from the Western and Eastern rivers, KHCL emphasized the need for Pakistan to respond proactively. The PPIB Board, in its 144thmeeting held on September 18, 2024, approved the extension of the LoS for the Kohala HPP until September 30, 2027. KHCL has since fulfilled all PPIB-mandated conditions, including the timely submission of a $5.62 million performance guarantee. KHCL has now urgently requested the issuance of a formal notification of the LoS extension to avoid loss of project momentum and to formally establish Pakistan's existing hydroelectric use on the Jhelum tributary—critical for protection under the IWT, unlike in the Neelum-Jhelum case. In view of the legal, strategic, and economic factors, KHCL has reiterated its request to PPIB for immediate issuance of the formal LoS extension notification, to secure Pakistan's water rights and broader national interests. Copyright Business Recorder, 2025
