10/1/2022

Knowledge Management
Assignment # 1
Submitted to:
Dr. Farhan Aslam
Submitted By:
Umair Saeed
Iqra Shaheen
Usman Khalid
Dated: 29th October 2022

KOAK POWER LIMITED

 TABLE OF CONTENTS

INTRODUCTION OF KOAK POWER LIMITED:......................................................................................2

A. CURRENT STATE OF AFFAIRS........................................................................................................2
B. PROJECT PARTIES............................................................................................................................3
PROJECT SPONSORS AND REQUIREMENT OF KNOWLEDGE.........................................................3
C. NEXT FIVE YEARS POSITION OF KOAK POWER LIMITED..........................................................4
D. KNOWLEDGE REQUIREMENT FOR THE EXECUTION OF THE 229 MW ASRIT KEDAM
HYDROPOWER PROJECT........................................................................................................................6
PRIVATE POWER INFRASTRUCTURE BOARD (PPIB)....................................................................6
CENTRAL POWER PURCHASING AGENCY (CPPA – G).....................................................................6
NATIONAL ELECTRIC SUPPLY & POWER REGULATORY AUTHORITY (NEPRA)........................7
CONCLUSION:........................................................................................................................................7

1|Page
 INTRODUCTION OF KOAK POWER LIMITED:
KOAK Power Limited (the “KPL” or the “Company”) is developing 229MW Asrit-Kedam
Hydro Power Project is a runoff river hydropower project at Swat River in KPK province,
Pakistan. The project is currently in the pre-development phase and the Feasibility Study is
being updated. KOAK Power Limited is the special purpose company developing the Asrit-
Kedam Hydro Power Project as an IPP through PEDO.

The project is in the KPK Province on the Swat River in the reach between the Asrit and the
Kedam Villages. The Swat River is formed by the junction of the Gabral and the Ushu Rivers
at the Kalam. The total length of the Swat River is about 225 km and its catchment basin in
the Asrit intake covers an area of 2170 km2

A. CURRENT STATE OF AFFAIRS

Currently KOAK Power Limited has received the Letter of Interest (LOI) from the Private
Power Infrastructure Board (PPIB) in the same 229 MW Asrit Kedam Hydropower Project
is one of the leading hydropower projects being developed in the private sector under
Policy for Power Generation Projects 2016 as adapted in KPK.

The ultimate owner of the Project is the Government of Khyber Pakhtunkhwa, and it is a
project of “national importance and public interest”. Its primary purpose is the generation
of electricity through which it shall create great economic and direct revenue opportunities
in the State which include:

A. Water Use Charges per annum – Rs. 100,000,000 (10 crores)

B. Construction tax (5 years) – Rs. 1,000,000,000/- (One billion)
C. Company’s direct taxes (5 years) – Rs. 250,000,000/- (25 crores)
D. Complex Price at transfer – Rs. 35,000,000,000/- (35 billion)
E. Government revenue after – Rs. 3,500,000,000/- (3.5 billion) transfer per annum

2|Page
The overall project cost is 500 million USD, through which 75:25 debt-equity ratio, in view
of this 75% of the funds are pooled by lenders i.e., Asian Development Bank (ADB),
International Finance Cooperation (IFC), Korea Export-Import Bank (K-EXIM) and 25% is
pooled by sponsors, i.e., Korea Energy (KOEN), Daelim Industrial, and Lotte

To contribute its part in fighting against the energy crisis and to develop the Project on a
fast-track basis, a renowned South Korean Consortium led by Korea Southeast Power Co.
Ltd. (“KOEN”) acquired the virtually dormant Project in January 2021.

The Company has scheduled execution of the KPK Implementation Agreement, Water Use
Agreement, and Land Lease Agreements in a ceremony witnessed by the Honorable Prime
Minister of KPK followed by the finalization of Direct Agreements between the government
and Lenders and creation of security in favor of Lenders.

The Company will also complete the Consent required from government entities following
the execution of these agreements. The Company expects finalization of the Tariff Proposal
and approval of the Power Purchase Agreement latest by end of March 2027 followed by
execution of the Power Purchase Agreement. The Finance Documents are also planned its
execution by the end of March 2027 and will complete the Condition Precedents for
Financial Closing by end of April 2027.

B. PROJECT PARTIES

PROJECT SPONSORS AND REQUIREMENT OF KNOWLEDGE

Korea southeast Power Co. Ltd. is a leading generation company in Korea and owns 10,000
MW capacity which is 10.7% of total Korea’s generation capacity. KOSEP has an asset base
of US $ 7 billion. Currently, KOEN is the main sponsor of the 229 MW Asrit Kedam Hydropower
Project they collect data that includes feasibility study, EPC estimation, and technical studies.

3|Page
ADB is a multilateral development finance institution established in 1966 and is owned by
63 members, mostly from the region. ADB will contribute US $ 100 million in the funding of
the Project. Currently, ADB is the main lender of the 229 MW Asrit Kedam Hydropower
Project in Swat (KPK) they take information from their financial advisor i.e. (Mott
MacDonald, Sherman & Sterling and Karbraji and Talibuddin, the same they will take
constant feedback from the sponsors, their legal advisors to make their investment secure

IFC is a member of the World Bank Group and is providing US $ 110 million in funding for
the Project.

K-EXIM is an official export credit agency providing comprehensive export credit and
guarantee programs to support Korean enterprises in conducting overseas business.
KEXIM is providing US $ 150 million in funding for the Project. They need
information/knowledge by understanding the feasibility study, legal advice from Kabraji
and Talibudin, and constant monitoring of the economic indicator of Pakistan to make their
investment secure.

CDC is the UK’s development finance institution owned by UK Government and got their
approval to invest US$ 90 million, they will take the information/knowledge regarding
finance aspects from all the sponsors and lenders to make their investment secure.

C. NEXT FIVE YEARS POSITION OF KOAK POWER LIMITED

 Completion of Project Acquisition, the establishment of an Office in Islamabad and a

branch office in Swat, and the recruitment of a professional team.

4|Page
 Finalization of Engineering Procurement & Construction (EPC) arrangements.
 The appointment other Owner’s Advisor was completed.
 Appointment of Lenders Advisors was completed.
 Finalization of revised Basic Design and Project Cost & contingencies.
 Full arrangement of loan and equity.
 Financing Term Sheets, Financing Documents, and Sponsor Support package with
the Lenders have been finalized.
 Lenders’ due diligence for all aspects of the Project has been completed
 Environmental and Social Impact Assessment (ESIA) has been completed and NOC
has been issued by KPK EPA.
 Complete acquisition of land for both private and government-owned land
 The resettlement Action Plan and Lenders’ due diligence have been completed
 The tariff Proposal has been negotiated and finalized with the Power Purchaser with
its Board approval in place and is being processed in NEPRA
 The power Purchase Agreement has been negotiated and is in process of approval
by NEPRA
 Concession Documents GOP Implementation Agreement executed, KPK
Implementation
 Agreement and Water Use Agreement are finalized) including its due diligence by
Lenders.
 Pre-Construction services Contract execute, and the Contractor is mobilized
 The EPC Contract has been finalized
 Owner’s Engineer (JV of MWH & NESPAK) has been appointed, involved in the
completion of the project’s technical due diligence, and mobilized on-site to
supervise construction
 O&M Contract has been finalized with Lender’s due diligence
 Project’s insurances are in place Project’s financial model and its audit from
Lenders are complete
 Inter-creditor Agent and Security Trustee have been appointed.
 The list of Consents and CPs for Financial Closing has been finalized with the
Lenders  Letter of Support has been extended up to April 30, 2027.
5|Page
6|Page
 D. KNOWLEDGE REQUIREMENT FOR THE EXECUTION OF THE
229 MW ASRIT KEDAM HYDROPOWER PROJECT
PRIVATE POWER INFRASTRUCTURE BOARD (PPIB)

KOAK Power Limited will have strong coordination with the Private Power and
Infrastructure Board (PPIB) on behalf of the Government of Pakistan (GOP) to promote
private investments in the power sector in Pakistan. The role of PPIB has been further
expanded by the GOP by allowing it to facilitate public sector power and related
infrastructure projects in IPP mode, for which PPIB's Act has been amended in November
2015. Moreover, with the help of PPIB, we will be able to negotiate the below-mentioned
agreements.

a. Government of Pakistan Implementation Agreement (GOP IA).

b. Government of Khyber Pakhtunkhwa Implementation Agreement (GOKPK IA).
c. Power Purchase Agreement (PPA)
d. Water Use Agreement (WUA).
e. Land Lease Agreement (LLA), with the help of DC swat.

Given the above, we will be able to collect the information and convert it into useful
information accordingly.

CENTRAL POWER PURCHASING AGENCY (CPPA – G)

We KOAK Power Limited will have strong coordination and take information/knowledge
with Central Power Purchasing Agency (CPPA-G). Since June 2015, CPPA-G has assumed
the business of the National Transmission and Dispatch Company (the “NTDC”) regarding
the market operations and presently functioning as the Market Operator by the Rule of the
NEPRA Market Operator (Registration, Standards, and Procedure) Rules, 2015 and also
help us to take information for the tariff setting for the reimbursement of the project cost
by Government of Khyber Pakhtunkhwa.

Given the above, we will be able to collect the information and convert it into useful
information accordingly.

7|Page
NATIONAL ELECTRIC SUPPLY & POWER REGULATORY AUTHORITY (NEPRA)

We KOAK Power Limited will also have a strong cording with the National Electric Power
Regulatory Authority (NEPRA) the exclusively regulate the provision of electric power
services in Pakistan. The Regulation of Generation, Transmission and Distribution of
Electric Power (Amendment) Act, 2018 [Act No. XII of 2018] (The Act) has overhauled the
role and responsibilities of NEPRA. Through this act, NEPRA will decide or help us to set
the tariff of the electricity per unit cost.

NEPRA is one of the biggest sources which provides us with the information and
knowledge, through which we will be able to inculcate.

CONCLUSION:

The Company has scheduled execution of GOP Implementation Agreement, Water Use
Agreement and Land Lease Agreements in a ceremony witnessed by all the major
stakeholder of the company i.e., PPIB, CPPAG, PEDO, Ministry of Water & Power by
finalization of Direct Agreements between government and Lenders and creation of
security in favor of Lenders, with the mutual consent of Lenders, Sponsors Government
entities/organization and shared the knowledge and information and signed the agreement
subsequently.

The Company will also complete the Consents required from government entities following
execution of these agreements. The Company expects finalization of Tariff Proposal and
approval of Power Purchase Agreement latest by end of March 2023 followed by execution
of Power Purchase Agreement. The Finance Documents are also planned its execution by
the end of May 2015 and will complete the Condition Precedents for Financial Closing by
end of April 2015. The Company scheduled its financial closing on April 30, 2025, followed
by full swing construction start and will achieve Commercial Operations within 48 months
and connect to grid in April 2027. Lastly KPL will share the information and take the
consent from Government i.e., PPIB, CPPAG, DG PPC and PEDO

8|Page