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Print Print 2023-11-08

SIFC body zeroes in on RE projects

  • Executive Committee of Special Investment Facilitation Council constitutes an inter-ministerial panel
Published November 8, 2023

ISLAMABAD: The Executive Committee (EC) of Special Investment Facilitation Council (SIFC) has constituted an inter-ministerial panel to holistically review the issues of Category-III wind and solar PV projects including 13 at advanced stage and other pending LoIs, well informed sources told Business Recorder.

The issues of renewable energy were deliberated at the EC of SIFC in two days (October 23, 24, 2023) meetings wherein the viewpoints of projects’ sponsors came under discussion.

The SIFC has twice given directives to Minister for Power Division, Attorney General of Pakistan (AGP), Secretary Law and Justice Ministry, Secretary Power Division, Managing Director Private Power and Infrastructure Board (PPIB) and Chief Executive Officer (CEO) Central Power Purchasing Agency-Guaranteed (CPPA-G) to submit a report on Category-III project in 15 days.

SIFC identifies 9 power projects worth $6.87bn

Power Division sources said over one hundred wind and solar (renewable energy RE) power projects are not being facilitated under different excuses.

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-MW 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.

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 of land with IRZs, while in Sindh there are 490 MW wind, 590-MW solar with 21 and 4 solar LoIs, respectively. In KPK there are solar 250-MW with four LoIs and in 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 has not borne any fruit 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 50- 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 was 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 a savings clause.

The sources said Power Division has also shared the list of 100 RE projects which are delayed due to bureaucratic hurdles.

According to sources, Power Division wanted to scrap all renewable projects including those which have already been given tariff by the National Electric Power Regulatory Authority (Nepra); however, Power Division’s proposal has not been entertained by the Committee which had been assigned to prepare its recommendations.

Copyright Business Recorder, 2023

Comments

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Mubashir Munir Nov 08, 2023 09:47am
We should be prepared thoroughly before going to discuss renewable projects as we are to retire old IPpS and then we seek investment why we don't offer in enti encentives to our overseas Pakistanis instead of UAE and Saudi Arabia
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Tariq Qurashi Nov 08, 2023 12:16pm
It seems that the usual red-tape and complicated approval processes are causing delays. The government has to get rid of this red-tape and simplify procedures and processes if they wants FDI in renewable energy, or for that matter any kind of investment in Pakistan. Trying to bypass and speed up the red-tape won't work. We have to get rid of it. Someone needs to be hired to help simplify processes and procedures to facilitate and not hinder investments. If you let the bureaucrats keep strangling the economy and tying everything up in knots, then I am afraid Pakistan is just not going to go anywhere.
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