LAHORE: The accumulation of circular debt and its progression can be stopped through better models of institutional governance and a firm strategy of reducing reliance on imported fossil fuel resources which will pave pathway towards building indigenous energy economy that may equally reduce the price of electricity as well as shrink the carbon footprint.
Chief Executive Officer CEO of Public Private Partnership (PPP) Authority Amjid Ali Awan said this while addressing a consultative session which was mainly called upon to analyze the options relating to the provision of carbon neutral sources of energy – solar and biomass - to government entities, which may partially or wholly shift the load from expensive grid based power to cheaper green (renewable) energy resources through PPP modalities.
He shared that many countries have adapted energy policies and laws to encourage investment in renewable energy (RE) sources to leverage private capital and expertise to support the development of renewable energy projects.
While sharing his proposal under PPP arrangement, Awan said although Business-to-Government (B2G) option can be utilized for the provision of energy supply to government entities by involving private sector, the wheeling of electricity will be a critical factor. This requires shifting the focus for the anticipated agreeable form of “wheeling regulations” which were previously issued by NEPRA.
Awan further said that enactment of Punjab PPP Act 2019 has been the key milestone whereas a reasonable footprint of PPP projects has already been attained. He said Punjab PPP Authority in addition of executing the projects in the pipeline intends to approach different sectors of economy through its sector diversification strategy involving, water, and transport, energy, housing and tourism areas.
He claimed that presently, the concession agreement for PPP projects worth PKR 50 billion have already been executed while a broad based pipeline of PKR 200 billion has been earmarked, involving PPP projects evolving at different stages of project structuring as part of PPP life cycle in the province of Punjab.
The Punjab PPP Act provides liberal pathways that allow the private sector to propose PPP projects in the renewable energy sectors for which the Authority is jointly working out with all stakeholders to structure viable PPP projects while maintaining transparency as well as achieving desired Value for Money (VFM).
The CEO Punjab PPP Authority further said that the generation of energy through renewable and indigenous resources will ultimately result into low carbon footprint that will match with the countering climate change phenomena which entails critical vulnerability on the part of Pakistan.
Regarding liberalization of electricity market, he said that there is ample appetite being felt by the market players towards deregulation of electricity sector involving multiple buyers and sellers of electricity.
He appreciated the measures of NEPRA for its ongoing regulatory reform being introduced in the country in the form of Competitive Trading Bilateral Contract Market (CTBCM) and further opined that the next steps should be to allow Business to Business (B to B) and Business to Government (B to G) arrangements in the market to take the market re-structuring at retail levels.
He said that the later arrangement better suits the PPP modality, by which the load requirement of government entities like WASA with the current requirement of 90 MW of power can be partially shifted to cheaper and green energy resources like solar photovoltaic. This is the way PPP modalities can be employed to procure cheap green resources of power to government entities and industries.
The representative of NEPRA, Gul Hasan Bhutto, appreciated the efforts of Punjab PPP Authority for his efforts towards playing his part in the process of market liberalization and building consensus through stakeholder. He further viewed that market liberalization through PPPs is an encouraging initiative, which needs to be reviewed by all the concerning stakeholders in the light of grid code and prevalent market re-structuring initiatives.
He informed that eventually future is of the retail marketing and NEPRA is working on the frameworks of institutional, regulatory and policy side which will support private sectors players in provision of energy. The participants raised key questions regarding new policy initiatives to be introduced by NEPRA for the private sector developers.
The session involved participants from National Electric Power Regulatory Authority (NEPRA), Lahore Electric Supply Company (LESCO), Punjab Power Development Board (PPDB), Water and Sanitation Agency (WASA). Quaid-e-Azam Thermal Power Plant Private Limited, Punjab Power Development Board Limited (PPDP) and other private sector developers and Transaction Advisors.
Copyright Business Recorder, 2022