ISLAMABAD: German Renewable Energy (RE) companies have shown no interest in Pakistan’s flagship solar power project of 600 MWp at Muzaffargarh saying that too much risk is involved in the project as to the European market.
This assertion was shared by Gerd Schober, Team Leader, M/s GIZ REEE II Project, Pakistan, in response to a letter of Secretary Power Division Rashid Mehmood Langrial.
On March 22, 2023, Power Division in letter to M/s GIZ had proposed areas of interest in promotion and development of ARE technologies, considering the priorities of Pakistan.
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Power Division has attracted German private sector participation in development/deployment of solar energy under the fast-track solar initiatives especially in the competitive bidding for development of 600 MWp solar PV project at Kot Addu/Muzaffargarh.
“We shared all information regarding the 600MWp solar project with the German Solar Association and with German companies. The feedback we receive from German companies is that too much risk is involved in this project when compared to the currently vast opportunities in developed markets in Europe,” said Gerd Schober.
He further contended that RE market in Pakistan is not mature and Pakistan is facing a difficult political-economic environment at the moment. Also, the benchmark price is too low as interest rates went up drastically to fight inflation and credit conditions have been tightening. In the past, a number of companies left the Pakistan market because of the difficult business environment.
However, there are still a few remaining top-tier companies such as Siemens, ib Vogt, and Sowitec who remain interested in developing projects in Pakistan. “To regain the trust of EPC companies and investors in Germany we consider some positive signs and success of active German companies in Pakistan as a crucial first step,” he added.
M/s GIZ has recommended that the Power Division builds good relationships with German companies during international fairs and events. A delegation from Pakistan consisting of officials from the public and private sectors recently visited the Berlin Energy Transition Dialogue (BETD). The purpose of this yearly event is to meet with German public and private sector representatives and to exchange information about the clean energy transition undergoing in their respective regions.
The study tour was a very good experience for all involved, as attested by the feedback from the delegates. PGREF will be able to produce an impactful output in core areas/task forces and could attract new German companies for the Pakistani market.
During BETD, AEDB representatives had the opportunity to meet German private sector developers of solar power plants and to introduce them to the Government of Pakistan Solar Initiative. As a final part of the study tour an online follow-up meeting with the delegates is planned in 2-3 weeks’ time. PGREF will issue a final report after the follow-up meeting to be able to integrate these findings and the next steps of action.
The next important event for the solar sector is the Intersolar Fair in Munich on June 13-14, 2023. Intersolar will provide a good opportunity to promote the Pakistani Solar Initiative in front of a large international audience. Preparations to send a delegation from Pakistan to the Intersolar Fair are under way.
M/s GIZ has assured Power Division of its continuous effort to build connections between the Pakistan and German RE market.
The company argues that participation of German companies in competitive bidding to be carried out by DISCOs for development of small solar PV projects of up to 4 MWp capacity at feeder level all across the country could be an interesting segment for German companies.
According to the company under the REEE-1 project of GIZ, the latter is in process of developing a tool for DISCOs for selection of optimal capacity and injection point on the feeder. The tool will be initially developed for a single DISCO and shall be scalable.
Commenting on proposal for attracting German OEMs for considering local manufacturing of RE equipment including solar PV panels, charge controllers, wind turbines, lithium-ion batteries and allied component through direct investment, joint venture or technology transfer, M/s Deutsche Gesellschacft Fur Internationale Zusammenarbeit (GIZ) GmbH says that the conference and exhibition will provide a good platform for Government of Pakistan to present its evolving renewable energy sector along with attractive investment opportunities.
Copyright Business Recorder, 2023