THE Khyber Pakhtunkhwa Power Development Programme envisages construction of 356 micro hydropower plants and some medium-size projects to provide cheaper electricity.

A senior official says the provincial government has prioritised five projects for execution — Matiltan, Koto, Lawi, Jabori and Karora. These would produce 216 megawatts of electricity collectively. “We need at least Rs64bn for the execution of these projects,” he said.

The Pakhtunkhwa Energy Development Organisation (PEDO) raises Rs3bn annually for the KP government through generation of 105MW of electricity.

The PTI-led coalition government is working on projects of over 3,000MW. Much of the progress will depend upon the approval process of these schemes as projects above 50MW need the federal government’s nod.

KP has an Rs15bn hydropower development fund to initiate these projects. The province would receive past arrears of Rs70bn from the centre in four years as agreed by the federal government.

The official is optimistic that the timely release of the funds will largely resolve the issue of cash to initiate work on the identified projects. But KP has also issues with the federal government on four operational projects.

Industrialists will be encouraged to set up their factories near hydropower generation spots

Pesco has not paid Rs900m arrears to the Pehur Power Plant (12MW). It is only paying 20pc for electricity supply. In February 2016, the federal government agreed to evolve a mechanism to settle the matter..

Moreover, Machai, Mardan (2.6MW) and Ranolia, Kohistan (17MW) plants are still awaiting connection to the national grid by NTDC/Pesco in spite of the fact that advance payments have been made by the provincial government.

Construction was initiated on three projects — Jabori, Mansehra (10.2MW), Karora, Shangla (11.8MW) and Koto, Dir (40.8MW). All formalities are at advance stage for awarding contracts for two other projects — Lawi, Chitral (69MW) and Matiltan, Swat (84MW).

According to the PEDO documents, feasibilities of 17 power projects have also been completed which will add another 2,525MW to the national grid. The PEDO has also identified projects to be transferred to the local communities.

Moreover, 10 pilot projects of run of canal will be completed in a year’s time. The feasibility study of 800MW gas-based combined-cycle power plant is underway. The federal government would allocate 100mmcfd gas to the KP government to use it in power generation either on its own or through partnership with the private sector.

The power policy revolves around two basic themes — assured cheap hydro-based electricity to industries and private sector-led management of the industrial zones. Cheap electricity will be offered to the investors near the gas extracting spots.

Under the policy, industrialists will be encouraged to set up their factories near hydropower generation spots. Electricity would be supplied to such industries from the new projects through wheeling charges by using the Wapda distribution network.

For example, Gadoon Amazai Industrial Estate in Swabi district will be offered electricity at cheap and concessional rates and on a priority basis from Pehur High Level-I hydropower plant. Investors in Dargai, located in semi-tribal Malakand Agency (earlier identified for setting up an industrial zone), will be offered electricity from the Malakand-III hydropower plant.

The Malakand-III power station generates 553m kilowatt per hour (kWh) of electricity annually. The cost of generation is around 2.18 cents per kWh. And its electricity is sold to Wapda at a cheap rate. .

The PTI-led government intends to revise the agreement with Wapda, to get higher per unit rate, and secure a maximum share of power for the industrial zone to be set up nearby. Experts say if the hydro energy can yield more than Rs50bn in annual profits for KP, the province would be able to launch massive projects for poverty eradication and job creation.

Published in Dawn, Business & Finance weekly, March 21st, 2016