Tax holiday likely for investors in solar and wind energy projects, setting up of AEDF on cards

The government is planning to establish Alternative Energy Development Fund (AEDF) and is likely to announce tax holiday for setting up projects in this sector by both domestic and foreign investors.
Official sources told Business Recorder here on Friday that Finance Ministry is reviewing different proposals on the issue of establishing the AEDF in 2004-05 budget.
Sources said that there were different proposals for fixing the amount of the fund.
The Alternative Energy Development Board (AEDB), which works under Prime Minister Secretariat, may also get some special grants for various projects to be launched from 2004-05.
According to sources, the government is also likely to allow duty-free import of equipment for setting up energy production units in wind, solar and other technologies.
When contacted, the AEDB chairman Air Marshal Shahid Hamid (Retd) confirmed that the government had assured the Board of establishing AEDF in the next budget. "Yes, the government has assured the Board that there would a special fund," said the chairman but did not give any further detail.
He said that there was strong interest of the government in this sector. The AEDB, which was established to supplement Wapda to meet the electricity requirement of the country, has been tipped to attract $400 million to $500 million investment in the field of alternative energy.
Companies from US, China, Germany, Denmark and other countries have shown interest to invest in alternative energy sector.
"Most of the companies are interested to invest in the wind technology," he said.
The government has targeted 10 percent production of total installed capacity of the energy sector by 2010 from alternative resources.
He said that AEDB was acting as a facilitator, and private sector would be encouraged to come forward to utilise the 'abundant' potential of solar and wind energy.