South Korea’s KOEN Plans $1 Billion Investment in Two Hydropower Projects in Swat

Pakistan is reviewing a major South Korean clean-energy investment that could add 467 megawatts of hydropower capacity in Khyber Pakhtunkhwa’s Swat district.

The proposal comes from Korea South-East Power Company, commonly known as KOEN, a South Korean state-owned power company. The investment involves two projects: the 229MW Asrit Kedam Hydropower Project and the 238MW Kalam Asrit Hydropower Project. Together, they represent one of the most important foreign-backed renewable energy proposals currently under discussion in Pakistan.

What Is KOEN Offering Pakistan?

According to Pakistan’s Commerce Ministry, KOEN has arranged around $1 billion in debt and equity financing for the two projects and has already spent nearly $25 million on project development. The ministry said the projects have completed major feasibility, environmental and regulatory studies, but are still awaiting key decisions, including tariff determination and inclusion in the draft Indicative Generation Capacity Expansion Plan 2025–35.

The proposed projects are located on the Swat River system in northern Pakistan. KOEN’s own project portfolio lists Asrit Kedam as a 229MW project and Kalam Asrit as a 238MW project, both under development around 375km north of Islamabad.

Why This Matters for Pakistan

Pakistan needs cheaper, cleaner and more reliable electricity. Hydropower is one of the few energy sources that can reduce dependence on imported fuel while supporting long-term tariff stability.

The two KOEN-backed Swat projects could help Pakistan in three ways.

First, they would add nearly 467MW of renewable generation capacity. Second, they would bring foreign direct investment at a time when Pakistan is trying to rebuild investor confidence. Third, they would strengthen energy cooperation between Pakistan and South Korea — a country that has already delivered a successful hydropower project in Pakistan.

KOEN has been active in Pakistan’s energy sector since 2011 and completed the 102MW Gulpur Hydropower Project in 2020. That gives the company a track record in Pakistan, not just an investment promise on paper.

The Problem: Regulatory Delays

The opportunity is real, but so is the risk.

KOEN’s proposed projects have been stuck in Pakistan’s complex approval system for years. Business Recorder reported earlier that the Letter of Intent for the 229MW Asrit Kedam project was issued in June 2021, while the 238MW Kalam Asrit project had an earlier LoI dating back to April 2018. The same report noted that feasibility studies were approved in 2022 and that the projects had approached NEPRA for generation licences and tariff approvals.

In 2025, concerns over delays became serious enough that senior officials raised alarm over Pakistan’s handling of the Korean investor. KOEN reportedly said its two hydropower projects remained stalled due to prolonged action on tariff petitions, despite completing policy milestones under the Power Generation Policy 2015.

For Pakistan, this is not just about two power plants. It is about investor confidence. If a credible state-owned foreign company arranges financing, spends millions on development and still waits years for clarity, future investors will think twice.

Pakistan’s Energy Reassessment

There is another side to the story.

Pakistan is currently reassessing future electricity demand after years of surplus generation capacity, high capacity payments and rising power-sector costs. That is why the government is reviewing whether new projects should be added to the national generation plan.

This caution is understandable. Pakistan cannot afford expensive power projects that worsen circular debt or increase capacity payments. But hydropower is different from imported-fuel plants. Once built, it can provide long-term renewable electricity without exposure to global coal, LNG or oil price shocks.

The real question should not be whether Pakistan needs clean energy. It should be whether the tariff, timeline and financing structure are affordable enough for consumers.

What the Government Says

Commerce Minister Jam Kamal Khan met a KOEN delegation led by CEO Kim Min Young in Islamabad on July 1, 2026. The Commerce Ministry said the government would engage relevant federal ministries, departments and authorities to coordinate consideration of KOEN’s concerns. It also said Pakistan remains committed to supporting credible foreign investors within the applicable legal and regulatory framework.

That statement is positive, but investors will now be watching for action — not just meetings.

The Bigger Opportunity for Swat and KP

If completed, the projects could also bring local economic benefits to Swat and Khyber Pakhtunkhwa.

Large hydropower projects create construction jobs, road access, engineering work, local procurement, technical training and long-term operations employment. They can also support provincial royalty and water-use revenue frameworks, depending on final agreements.

However, the projects must be developed responsibly. Swat is an environmentally sensitive region with tourism, river ecosystems and local communities that depend on natural resources. Any hydropower development must maintain environmental flows, protect local livelihoods and ensure transparent community engagement.

What Pakistan Must Do Next

Pakistan should move quickly but carefully.

The government needs to:

Finalize tariff review without unnecessary delay
Decide whether the projects fit IGCEP 2025–35
Protect consumers from unaffordable capacity costs
Give KOEN a clear yes-or-no investment pathway
Ensure environmental and social safeguards in Swat
Use the project to rebuild foreign investor confidence

Delays are costly. A project can survive regulatory scrutiny, but it cannot survive endless uncertainty.

Bottom Line

KOEN’s proposed $1 billion investment in Asrit Kedam and Kalam Asrit is a test case for Pakistan’s clean-energy future.

If Pakistan can process the projects transparently, negotiate fair tariffs and protect local communities, the country could secure 467MW of renewable power and strengthen ties with South Korea.

If it mishandles the process, Pakistan risks losing not only one investor but also the trust of future clean-energy partners.

FAQs

What projects is KOEN proposing in Pakistan?

KOEN is proposing the 229MW Asrit Kedam Hydropower Project and the 238MW Kalam Asrit Hydropower Project in Swat, Khyber Pakhtunkhwa.

How much power will the projects generate?

Together, the two projects would add 467MW of installed hydropower capacity.

How much is the investment worth?

Pakistan’s Commerce Ministry said KOEN has arranged around $1 billion in debt and equity financing for the two projects.

Why are the projects delayed?

The projects are awaiting key regulatory decisions, including tariff determination and inclusion in Pakistan’s draft IGCEP 2025–35.

Has KOEN worked in Pakistan before?

Yes. KOEN completed the 102MW Gulpur Hydropower Project in 2020.

Why does this investment matter?

It could bring clean energy, foreign direct investment, jobs and stronger Pakistan-South Korea energy cooperation — if regulatory issues are resolved.