Power shortage in SMEs: BSF starts $92 million smart energy programme

The Business Support Fund (BSF) of the Ministry of Finance has initiated $92 million Smart Energy Programme to overcome energy shortage in Small and Medium Enterprises (SMEs). It is a joint venture with Smart Energy System. The programme to cut SMEs' energy cost by 30 percent.
The BSF has completed preliminary energy audit of some 150 SMEs, disclosed BSF Chief Executive Officer Syed Saquib Mohyuddin while addressing a press conference, here on Friday. He informed the media persons that a comprehensive PC-1 had been prepared, covering a total outlay of about Rs 8.035 billion ($92 million), which would be submitted to the Planning Commission of Pakistan next week. "The programme was expected to conserve about 100 MW power demand and release of about 80MW power system capacities, valued at about $160 million," he added.
The programme had conceived mobilisation of about 30 percent of resources from local investment banks and financing companies, while the rest would be generated with the help of international donors. It has two important components, including Rs 2.175 billion ($25 million) Energy Endowment Fund and Rs 2.175 billion ($25 million) Energy Investment Fund. The Energy Endowment Fund will generate resources to cover the cost of free energy support services and operating expenses of the programme.
It has estimated that free energy service will be offered to around 500 SMEs per annum. Similarly, Energy Investment Fund aimed at providing capital investment to the SMEs with part of the investment as grant. The funding for the Energy Investment Fund shall be obtained preferably interest free with 50 percent non-returnable grant from international donors. The target is to provide 50 percent of retrofit cost as grant to preferably export oriented SMEs. The retrofit cost would be offered with 10-year repayment plan of the remaining 50 percent loan part of the programme.
Highlighting other salient features of the programme, Mohyuddin said the programme would have a modern web-based outreach and communication module in addition to printed material that would help SMEs in adopting best energy usage practices. "In the pilot phase, energy pre-audits of about 150 SMEs in the Quaid-e-Azam Industrial Estate, Kot Lakhpat, Lahore, had been completed, which accounts for about 46 MW connected load.
Detailed studies and field measurements were also carried out to determine the actual savings in selected SMEs. The programme's development was based on the research findings," he added. The BSF chief said the Smart Energy Programme has immense importance for Pakistan. The country was facing severe energy crisis and as a result cost of doing business was increasing and making SMEs incompetitive in the global market.