KARACHI: The Pakistan Solar Association (PSA) has urged the prime minister for removal of the import of solar panel and its equipment from the list of non-essential items as its imports can reduce the country’s import bill.
In a letter sent to Prime Minister Shehbaz Sharif, the PSA has also demanded facilitation for the immediate release of solar panel and allied equipment contracts stuck at ports to avoid huge financial losses in terms of detention and demurrage.
According to the PSA, as the country is facing an energy crisis and there is immense potential for solar energy in the country, however, the growth of the solar industry has been hindered by various challenges.
The PSA claimed that presently hundreds of containers are stuck at ports. The PSA members’ shipments were processed via prior approval from the commercial banks and now reached at ports or will be arriving very soon at the destination ports.
The shipments were processed with the needed approvals and consent from the commercial banks against the payment terms in liaison with the suppliers/importers, it said.
However, now imported containers of solar panels are stuck at ports and will cause a huge financial loss in terms of demurrage and detention. Along with the financial loss for the importers, this will also drain millions of dollars of valuable foreign exchange reserves in the shape of payments to the foreign shipping lines.
With the present import restrictions on the solar panel and allied equipment, traders, and importers have to bear huge financial loss and it will result in a surge in cost. The end user will have to pay high prices for the goods which in normal conditions would be much lower in comparison to the present situation, the PSA said.
Importers are also facing issues in dealing with the foreign suppliers as they are asking for payments of the goods.
The PSA has requested the prime minister for immediate release of solar energy and allied equipment import contracts to avoid huge financial losses in terms of detention and demurrage. Renewable energy equipment particularly the solar energy sector must be removed from the list of non-essential items or negative list and renewable energy technology considered as an essential utility, they demanded.
In addition, commercial banks should be asked to facilitate the importers’ need to support renewable energy in Pakistan. According to the PSA, by resolving these issues Pakistan can attract investors and international trades, stimulate economic growth, and can generate employment opportunities for the Pakistani youth.
In this regard, Vice Chairman PSA Zakir Ali has said that the country’s oil import can be reduced through easy availability of the solar panels; however, the slow import process is not only discouraging the use of solar panels but also increasing the cost of renewable energy.
He has appreciated the initiative taken by the government and the ministries for the promotion of solar in the county and announcement of tax free import of raw material and machinery for local manufacturing of solar panels and other equipment in the country.
He said that initiatives taken by the federal government for local manufacturing will boost technology innovation in the country. In addition, Pakistan can make a favorable environment and policies for foreign investors and invest in wide joint ventures (JV) with international technology companies, he added.
To ensure the continued inflow of investments, it is imperative that the government must establish a robust framework for their protection.
“The government must develop a 10-year solar policy with the consultation of all stakeholders to provide a secure investment environment and restore the confidence of the foreign investors,” Zakir suggested.
Copyright Business Recorder, 2023