KARACHI: The Federation of Pakistan Chambers of Commerce and Industry expects $500 million renewable energy projects to come online in six months if the government expedites their development for...
KARACHI: The Federation of Pakistan Chambers of Commerce and Industry (FPCCI) expects $500 million renewable energy projects to come online in six months if the government expedites their development for cheap electricity.
“High cost of energy coupled with circular debt is hindering the industrial growth and with rising oil prices it is imperative to bring down the energy cost for sustainable economic growth and to increase renewable energy share in the power mix to 20 percent by 2025 cheap renewable energy projects must be inducted,” Nasser Hyatt Maggo, president of FPCCI said in a statement.
The FPCCI demanded to amend a decision of cabinet committee on energy in April 2019 under which a project is not allowed to continue in spite of the project having been issued a ‘letter of intent’, granted a tariff, and issued a generation licence.
The project was erroneously omitted from the list of projects with letter of intent and tariff determination but no letter of support and was instead listed in projects at LOI stage.
“It is in the supreme national interest to amend the decision as it will not result in any subsidy, grant or concession. On the contrary it will pave the way for reducing the energy cost of the country, import bill and circular debt and bring in much needed foreign investment to the tune of $500 million within next six months besides saving Rs20 billion / annum to the national exchequer,” he said.
Maggo said the government recently awarded the lowest tariff of average Rs5.95/kilowatt-hour to 12 projects of 670 megawatts. If they are not realized, consumers have to cough up Rs20 billion in energy cost per annum.
“There is a shortage of approximately 3,000 MW in peak demand based on current energy mix and taking into consideration the efficiencies’ and line losses there is an urgent need to install additional capacity of 5,000 MW to meet only the current demand,” he said.
FPCCI expressed frustration over the slow pace of decision making by the Federal Government as these projects sponsored by foreign investors have been waiting and willing to invest for last several years.
“Abrupt policy changes and lack of timely decisions have hampered the foreign investment and driven away investors to other attractive destinations,” said Maggo.
The government set ambitions to increase the share of renewable power in the energy mix to 30 percent by 2030 from about 4 percent. The targets in the newly announced policy are a 20 percent share of renewables in installed capacity of Pakistan’s power mix by 2025 and 30 percent by 2030.