Suki Kinari Hydropower Project: Nepra objects to proposed tariff modification

The National Electric Power Regulatory Authority (Nepra) has raised numerous concerns over the proposed changes to the tariff for the 884-MW Suki Kinari Hydropower Project. The tariff increase being sought by the project company is around four percent, from Rs9.04 to Rs9.40 per unit. However, Nepra has questioned the validity of this increase, particularly the substantial rise in the Water Use Charge (WUC).

This charge, which was proposed to be increased from Re0.15 to Re0.425 per kWh, represents an 183 percent rise. If implemented, this alone could affect consumers by around Rs25 billion over the remaining life of the project.

Nepra has requested detailed explanations from the project company regarding the proposed changes in project cost, including the design modifications, reduction in EPC cost, and the addition of two banks of 3x22 MVAr shunt reactors. The authority has also questioned the proposed methodology for calculating Interest During Construction (IDC) and interest during the operational period, and the adjustments made to project development, insurance, and management costs as a result of the extended construction period due to the COVID-19 pandemic.

The project, part of the China-Pakistan Economic Corridor (CPEC), is a significant hydropower project, and any tariff increase or project cost revision could have substantial implications for consumers. Nepra has set October 1, 2026 as the date for the public hearing on this proposed modification and has requested all interested parties to submit their intervention requests within one week.