Investment portfolio in renewable energy increases to US$1bn

ISLAMABAD: The friendly policies of the government are bearing fruits as investment portfolio in renewable energy sector in the country has increased by almost US $ 1 billion.

A new investor friendly Power Generation Policy-2015 has been approved by Council of Common Interest (CCI) which will facilitate to set up new plants as well.

According to an information mentioned in a budget document on Friday revealed that the government was encouraging domestic and international private investors in energy sectors, giving them favorable opportunities and incentives especially in alternative sources of energy.

As an example, use of grid-connected solar energy, rooftop solar installations and mortgage financing for home solar panels has been approved to boost clean energy in the country. Thus, the government had reversed course and eliminated a 32.5 per cent tax imposed on imported solar equipment which was aimed to bring down cost of installing solar panels.

Now investors from Germany, Qatar, Russia and some other countries have shown their interest to invest in energy sector.

Meanwhile, as per data, since 1991 the primary energy supplies had shown an annual compound growth rate of 3.6 percent and increased to 66.8 million Tonne of Oil Equivalent (TOE) in 2014 compared to 28.5 million TOE in 1991.

In 2014, per capita availability of primary energy supplies was estimated at 0.36 TOE while during July-March FY 2015, primary energy supplied increased to 50.9 million TOE compared to 48.8 million TOE showing a growth of 4.4 percent.

Although there is no significant change in per capita availability, however there exist substitution in share of sources as share of gas dominated the share of oil in total energy supplies as gas being the cheaper source compared to oil especially after 2000-01, beside Pakistan obtained Saudi oil facility from 1999 to 2004 and also subsidy given to oil sector by the government from 2002 to 2008 in order to give relief to consumer.

However, the later step created fiscal burden to the exchequer. Oil and natural gas still continued to be the top two energy sources accounting for above 70 percent of energy demand.