ISLAMABAD: Private Power & Infrastructure Board (PPIB) has shown willingness to facilitate Saudi company M/s ACWA early next month, which has shown interest in establishment of solar projects of 1200 MWp in South Punjab, well informed sources told Business Recorder.
PPIB Manager Director Shah Jahan Mirza informed Special Secretary SIFC that draft Inter Governmental Framework Agreement (IGFA) between Government of KSA and Government of Pakistan for cooperation and development of power projects in Pakistan had been prepared, and shared with Ministry of Foreign Affairs for further sharing with Riyadh.
According to PPIB, the Standard Security Agreements (EPA, IA) were shared with the RE team of the Saudi Pakistan Council by Power Division/PPIB via email on August 28, 2023, for their review. These Security Agreements are considered bankable and have already been executed for all operational solar/wind projects. In addition to investments from both local and international investors, key International Financial Institutions (IFIs) such as IFC, ADB, DFC/OPIC, ECO Trade Bank, CDC, CDB, and ICBC have extended lending support for the development of RE projects based on these Security Agreements.
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Managing Director PPIB has further stated that the GoP Guarantee is part of the Implementation Agreement shared with the Saudi Side. IA is umbrella concession agreement executed in the capacity as sovereign which not only covers and ensures fulfilment of all the contractual obligations of public sector entities of Federal Government and Provinces arising out of underlying documents such as EPA, Site Lease etc. but also as a principle document creates obligations on the seller/investors to fulfil its/their commitments to design, finance, engineer, construct, test and commission and at the end of term transfer the Complex under the project agreements.
Commenting on required guarantees, MD PPIB explained that on GoP Guarantee backstops the payment obligations of the Purchaser under the Energy Purchase Agreement, adding that alongside the GoP Guarantee, energy payments for projects developed under the Framework Guidelines 2022 are guaranteed through a direct debit mechanism. Under this arrangement, the Power Purchaser (CPPA-G) will issue irrevocable standing instructions to the Bank, maintained by the Power Purchaser and funded by distribution companies, to make payments via direct debit to the Seller upon receipt of a Notice of Claim.
Shah Jahan Mirza has further stated that the land earmarked for the development of solar PV projects in Layyah (600MWp) and Jhang (1200MWp), Punjab, is currently being acquired by NTDC in collaboration with the Punjab Government. He has recommended that the relevant entities accelerate the land procurement process. Talking about the grid studies confirming the necessary grid infrastructure for evacuation of power from both the projects (600MWp in Jhang and 1200MWp in Layyah) have already been prepared and shared with the RE Team of the Saudi Pakistan Council via email on August 28, 2023. Regarding the request from the Ambassador of Pakistan in Saudi Arabia to propose two alternative sets of dates for the upcoming visit of the ACWA Power delegation to Pakistan, PPIB has said that the Power Division/PPIB is available during the final week of March 2024 to extend utmost assistance and facilitation to the ACWA power delegation during their visit to Pakistan.
Copyright Business Recorder, 2024