ISLAMABAD: Prime Minister Imran Khan on Friday blamed the previous government’s ‘short-term’ policy of imported fuel-based power projects for the current expensive electricity and hoped that the target of increasing the share of renewable energy to 30 per cent by 2030 would result in affordable, sustainable and clean energy in the country.
He was speaking at the signing ceremony of six wind power projects agreements for which the International Finance Corporation (IFC) of the World Bank Group is providing $450million loan.
All these projects will have a nameplate capacity of 310megawatt.
These agreements originally were planned to be signed during the recent visit of the World Bank president to Pakistan, but were postponed due to bureaucratic hitches.
The prime minister thanked the IFC and the World Bank Group for resuming the almost elapsed projects due to negligence by the previous government. He said these projects would ensure cheap electricity for consumers as they were not based on imported fuel.
$450m agreements signed with World Bank for six wind power projects
Mr Khan appreciated his economic team’s efforts to address serious economic challenges inherited by the PTI government through prudent policies, leading to gaining strength of rupee, positive market trends, increased exports and restoration of investors’ confidence. He also appreciated efforts of the power sector authorities for over Rs120bn recovery of electricity bills from power thieves.
The prime minister had expressed displeasure a few days ago over the delay in the finalisation of these contracts due to reluctance of the ministry of energy despite tariff approvals by the National Electric Power Regulatory Authority (Nepra) a year ago.
Within a few days, a board meeting of the Alternate Energy Development Board (AEDB) was called on Nov 6 that approved letters of support (LOSs) to 11 wind power projects having a total generation capacity of 550MW.
Senior bureaucrats had told the prime minister that they could be subjected to National Accountability Bureau (NAB) investigation since almost all the project tariffs had been approved under cost-plus tariff formula without international competitive bidding.
It was also reported that the cabinet committee on energy in the previous government had also taken some decisions to put on hold fresh renewable energy projects because of capacity constraints. The levelised tariff of all these projects ranged between between 4.7 and 4.8 cents per unit (about Rs5.60 to Rs5.80 per unit) as per exchange rates prevailing before November last year.
The IFC has arranged a first-of-its-kind financing programme for six wind power projects and has named them Super Six. The financing agreements were signed by IFC’s Senior Manager Nadeem Siddiqui and private sector power developers. The Super Six plants, with a combined capacity of 310 megawatts, will deliver among the lowest cost power generation in the country to date.
They will be built in the Jhimpir wind corridor in Sindh and will generate more than 1,000 gigawatt hours of electricity annually, enough to power 450,000 homes. The programme is also likely to lead to emission reductions of about 650,000 tons of CO2 per year, the IFC said in a statement.
All Super Six projects are being developed by local companies: ACT Group, Artistic Milliners (Private) Limited, Din Group, Gul Ahmed Group and Younus Brothers Group.
“The government is aiming to increase the non-hydro renewable energy share in the overall generation mix from 4pc to 20pc by 2025, said energy minister Omar Ayub Khan.
He said 8,000MW would be added to national grid generated through renewable means by 2030, which would boost industrialisation and ultimately employment for locals.
“This additional clean power will help meet growing demand, reduce the average cost of electricity, and improve both reliability and security of supply,” IFC’s Vice President for Asia and Pacific Nena Stoiljkovic said.
“We hope this will send a strong signal to the private sector that the renewable energy market in Pakistan is viable and sustainable, as well as beneficial to the Pakistani people,” the IFC statement said.
The IFC is providing a financing package of $320 million, comprising $86 million from its own account and $234 million mobilised from other lenders, including Deutsche Investitions- und Entwicklungsgesellschaft (DEG, part of KfW Group of Germany), and local banks Bank Alfalah, Bank Al Habib and Meezan Bank.
Published in Dawn, November 16th, 2019