ISLAMABAD: The Private Power & Infrastructure Board (PPIB) has sought consent of Ministry of Climate Change for carbon credit sharing mechanism aimed at distributing carbon credits between the project sponsor and power purchaser equally.
PPIB is pursuing the development of Alternative Renewable Energy (ARE) based power generation projects though private sector investors in Independent Power Producer (IPP) mode under the policies of Government of Pakistan (GoP).
In a letter to Secretary Ministry of Climate Change, Managing Director PPIB, Shah Jahan Mirza stated that ARE projects have a potential to generate revenues through the sale of carbon credits under CDM and other regimes. The first renewable energy policy (RE Policy 2006) stipulated a carbon credit sharing mechanism whereby the revenues through the sale of carbon credits generated by the ARE projects were to be shared between the project sponsor and the power purchaser.
Currently, PPIB is pursuing the development of a solar PV project of 600-MWp capacity at Kot Addu / Muzaffargarh, Punjab through competitive bidding under the initiative of substitution of expensive thermal power generation with solar PV energy in line with the Framework Guidelines for Fast-Track Solar PV Initiatives 2022. The standard approved Energy Purchase Agreement (EPA) of the project stipulates processing of carbon credits as per the applicable Government’s policy.
Managing Director, PPIB, argues that as carbon crediting mechanisms fall under the domain of Ministry Climate Change & Environmental Coordination PPIB has requested Ministry of Climate Change to provide clarification/ insights on the applicable policy/ mechanism with regards to processing and ownership of revenue generated through the sales of carbon credits by ARE projects. He further stated that in case there is no clear policy direction that exists in the matter, the Ministry may provide its consent to a carbon credit sharing mechanism whereby the revenues generated through the sale of carbon credits will be equally shared between the project sponsor and the power purchaser.
Copyright Business Recorder, 2023