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Print Print 2023-11-28

Security concerns: Saudi firm says unable to sign pacts on solar projects

  • Absence of some key enabling factors include lack of base tariff, legal framework for G-to-G collaboration, land, ability to pay for power and the issue of connectivity with grid
Published November 28, 2023

ISLAMABAD: Saudi firm M/s ACWA is reportedly unable to sign pacts on solar projects in Pakistan due to security concerns and absence of some key enabling factors, well-informed sources told Business Recorder.

Sharing the details, sources said, Pakistan’s Ambassador in Riyadh recently met Chairman ACWA Power, Muhammad Abunayyanan. Saudi Ambassador to Pakistan was also present in the meeting.

The ACWA Power is a developer, investor and operator of a portfolio of power generation and water desalination plants with a presence in 12 countries whose power sector portfolio is in excess of $ 74.8 billion and a capacity of more than 50 GW of power and 7.6 million m3/day of desalinated water.

Businesspeople urge govt to lay focus on renewable energy

According to Pakistan’s Ambassador, ACWA Power was interested in investing in the solar sector of Pakistan but its efforts could not materialise due to security concerns and absence of some key enabling factors, notably the lack of base tariff, legal framework for G-to-G collaboration, land, ability to pay for power and the issue of connectivity with grid.

Ministry of Foreign Affairs argued that this is a very important initiative for Saudi government and Crown Prince MBS is himself interested in it, which he mentioned to former PM Shahbaz Sharif in a meeting in October 2022.

The sources said, to pursue this high-profile proposal, Chairman Abunayyan agreed to the Ambassador’s request to undertake an exploratory visit to Pakistan for focused meetings and briefings at the Ministry of Energy. To this end Pakistan’s Ambassador has suggested advance preparations by Power Division and other stakeholders so as to make the visit fruitful.

K-Electric (KE) has shown an interest in development and offtake of power from renewable energy (RE) projects of 3,000 MW to be developed by M/s ACWA Power, which is mainly focusing on Saudi Arabia.

The KE, being the only private and vertically-integrated utility company in Pakistan, is responsible for the generation, transmission, and distribution of power in Karachi and its adjoining areas thereby, serving over 3.4 million customers.

The KE remains obligated for end-to-end planning of its power value chain and performs the functions of a planner for its service area.

The ACWA Power is a global investment and holding company with its headquarters in Riyadh, Saudi Arabia. With a strong presence in the energy and water sectors, ACWA Power operates across multiple countries, including Saudi Arabia, the United Arab Emirates, Jordan, Egypt, Morocco, Oman, and others.

According to the letter written by the KE’s Chief Executive Officer (CEO), Syed Moonis Abdullah Alvi, to the federal government, KE, has formulated a robust long-term development plan which focuses on development of RE projects and base load capacity based on indigenous resources.

Development of RE generation projects is a cornerstone of KE’s long-term generation planning strategy, which is in the process of development of several RE based initiatives.

CEO KE maintains that to further increase its RE footprint, KE believes that engagement with the ACWA Power, a formidable development company and sponsor has the potential to fast track development of large scale RE projects in Pakistan.

The ACWA had previously tried to venture into Pakistani market where it entered into a memorandum of understanding (MoU) in 2019 with the Government of Pakistan, which encompassed investment of $ 4 billion in solar and wind energy sector.

Unfortunately, past interest could not be actualized due to various impeding factors. However, KE is confident that it can convince ACWA Power to reconsider its interest for developing RE projects Pakistan to sell power to KE, and to work as its joint partner.

Copyright Business Recorder, 2023


Comments are closed.

Twain pen di Nov 28, 2023 09:21am
failures and more failures..
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Amigo Nov 28, 2023 01:52pm
Pakistan need strong Long military rule to clear all obstacles. Or Presidential form of government. Or one party rule like China. Strict implemention of Law. Capital Punishments for criminals. Pakistan will be strong again.
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Trthskr Nov 28, 2023 02:02pm
Translation: They do not trust the current set up!
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Muhammad Kashif Nov 28, 2023 02:20pm
Security concern plus irregular government policies play key roles in damaging the economy of Pakistan.
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Aamir Nov 28, 2023 02:21pm
@Amigo, do you want it to become North Korea? Who will live here then. Total brain drain will happen
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Abid Hussain Nov 28, 2023 03:07pm
Great work Noorani sahab. Certainly more school network should be developed the facilitate the dropouts all over the country. A humble request to friends to divert their charities to Noorani foundation and help further extending the good work
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Aam Aadmi Nov 28, 2023 03:41pm
Where is SIFC? Even Saudi Arabia has got security concerns, among others. Investors want to see much more than 'brotherly' relations or religious bonds. Such is our reputation!
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Aam Aadmi Nov 28, 2023 03:42pm
@Amigo, No more jokes, please.
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KU Nov 28, 2023 08:23pm
If shame had any value in our country, many leaders would be found drowned in a bucket. But this shall remain a cherished dream in country ruled by primates.
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Amigo Nov 28, 2023 10:16pm
@Aamir , Critics are genius. But just think, if the state fails to provide security Who will invest. Security is the Top priority. KSA attracts huge FDIs due to safety, security & excellent system. KSA is Kingdom. Kingdom means dictatorship, or One party rule. Same UAE, Jordan. China is the wealthiest country on Earth. One party rule. We are not a developed nation. We need some one very very powerful to rule and correct the system, otherwise we will be Somalia.
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Muhammed Nov 29, 2023 03:09pm
Right now we don’t need any further investment in renewables because we already have many wind power plants in Gharo & Dhabeji which are not being utilised because NTDC is unable to evacuate the whole production. KE, which is the nearest load centre, can be interconnected with these plants which will not only result in saving in unnecessary capacity payments & also benefit KE consumers in lower tariff because of supply from NTDC on basket price.
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Ch K A Nye Nov 29, 2023 04:55pm
@Amigo, been there several times and it never worked. Let's not pretend that the Armed forces are a solution. They can't even stop cross border terrorists.
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