G2G agreement: Pakistan govt plans to offer solar projects to Saudi firm

ISLAMABAD: Pakistan government has reportedly included two large-scale solar power projects, totalling 2,800 MW, in the Indicative Generation Capacity Expansion Plan (IGCEP) 2025-35, which may be offered to Saudi energy company M/s ACWA Power under a proposed Government-to-Government (G2G) agreement.

According to sources, the National Grid Company of Pakistan Limited (NGC), in a letter titled “Land Acquisition for Solar Power Projects at Layyah, Jhang and Muzaffargarh”, informed the Private Power and Infrastructure Board (PPIB) about the inclusion of these projects in the IGCEP.

Shah Jahan Mirza, Managing Director of PPIB, has conveyed to the Power Division that the draft IGCEP—currently under finalization—includes various scenario analyses by the System Operator (ISMO). Among them are two specific solar PV development scenarios proposing 1,000 MW and 1,800 MW capacity additions, earmarked for potential development by ACWA Power.

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However, he emphasized that the offer to the Saudi side would depend on the approval of these scenarios by NEPRA. Mirza also advised the Power Division not to de-notify the land identified for these solar PV projects until the IGCEP is formally approved.

The project’s future had earlier appeared uncertain. In November 2023, Pakistan’s Ambassador to Saudi Arabia reported that ACWA Power had declined to sign any agreement with Islamabad, citing security concerns. However, a shift in momentum was seen after a delegation of Saudi investors—including ACWA representatives—visited Pakistan and held talks with the Special Investment Facilitation Council (SIFC). Since then, Pakistan’s embassy in Riyadh has remained in contact with the company.

Despite renewed interest, hurdles remain. Saudi authorities have expressed concerns over the treatment of M/s Al-Jomaih, a Saudi investor involved with K-Electric. These concerns, officials said, have made Saudi investors cautious about engaging in new ventures in Pakistan. The Al-Jomaih issue is now being handled by Deputy Prime Minister Senator Ishaq Dar.

The inclusion of these solar projects in the IGCEP signals the government’s ongoing efforts to diversify its energy mix and attract foreign investment in renewable energy—though political and regulatory assurances remain critical to securing such high-value deals, the sources said.

Copyright Business Recorder, 2025