Stuck projects or those under arbitration: SIFC seeks information from govts
- Several international and local investors from different sectors are approaching SIFC Secretariat for resolution of their procedural and regulatory issues
ISLAMABAD: The Executive Committee of the Special Investment Facilitation Council (SIFC) has sought information from federal and provincial governments on the projects under arbitration or stuck up for a long time due to any reason, aimed at resolving all their issues to attract investment, well-informed sources told Business Recorder.
Several international and local investors from different sectors are approaching SIFC Secretariat for the resolution of their procedural and regulatory issues.
The SIFC has also sent a proforma to all the Ministries and Divisions for the information which includes: (i) project’s name; (ii) sector; (iii) project stage; (iv) location; (v) issue; (vi) focal person name, designation and contact; (vii) progress/latest measures undertaken; and (viii) recommendations.
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The sources said issues of over 100 wind and solar (renewable energy) power projects which are delayed since years, have also landed at the SIFC Secretariat as Power Division under the garb of IGCEP is not accepting hundreds of renewable energy projects.
According to Cabinet Committee on Energy (CCoE) decision, category-III projects are those projects that did not acquire tariff/generation licence from Nepra till the date of CCoE decisions of February 27, 2019 and which are to be processed through competitive bidding by erstwhile Alternative Energy Development Board based on IGCEP outputs and confirmation of Interconnection Ready Zones (IRZs) by NTDCL. IGCEP 2022 allows addition of 500 MW wind and 3,120 solar for the year 2025.
The sources said category-III includes 31 wind projects of 2,139 MW and 69 solar PV projects of 4,193 MW. Out of 31 wind and 69 solar projects, a total of 22 wind and 28 solar projects with land are falling under IRZs.
According to sources, in Punjab there are wind projects of 100 MW and solar PV 1,010, of which one wind and seven solar projects have been issued LoI holders with land with IRZs, Sindh 490 MW wind, 590 MW solar with 21 and 4 solar LoIs respectively. KPK solar 250 MW with four LoIs and Balochistan 1,190 MW wind and 2,500 MW solar, respectively.
In line with CCoE/CCI decision, Power Division recommended to carry out competitive bidding against a quantum of 500 MW for wind projects and 820 MW for solar PV projects.
Former Prime Minister’s Committee headed by former Prime Minister, Shahid Khaqan Abbasi, after several meetings raised the following observations: (i) existing policy hasn’t borne any fruits and all projects have witnessed inordinate delays;(ii) provinces have reservation on the conduct of competitive bidding; (iii) limited capacity can be procured through bidding process from category-III projects; (iv) disadvantage to LoI holders having capacity of up to 50 MW compared to LoI holders having capacity of 100 MW or above owning to economies of scale; and (v) fast-track mechanism needs to be evolved to clear the backlog.
The committee made following recommendations: (i) category-III wind and solar PV projects be allowed to proceed ahead upon acceptance of an upfront tariff to be announced by Nepra;(ii) AEDB now the PPIB to declare financial closing on first come first serve basis for a total capacity of 500 MW for wind and 2,500 MW for solar projects; (iii) sponsors would be required to submit Performance Guarantee of $ 10,000 per MW for issuance of Letter of Support (LoS) to ensure the commitments for financial closing by serious players; (iv) approval of CCI be obtained for processing of category-III projects on upfront tariff as both ARE Policy 2019 and National Electricity Policy (NEP) 2021 allow competitive bidding only; and (v) all future solar and wind projects will be developed through ICB to be carried out by PPIB or Discos as per approved schemes.
However, Ministry of Law and Justice, in its comments has made the following statement: “This Division is of the considered opinion that 100 RE projects are to be processed strictly in terms of the decision of the CCI of August 6, 2020 wherefrom the Renewable Energy Policy has arisen, which in turn contains as savings clause.”
The sources said Power Division has also shared the list of 100 RE projects which are delayed due to bureaucratic hurdles.
Copyright Business Recorder, 2023
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