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October 15, 2015

Investors protest tariff delay


October 15, 2015

ISLAMABAD: Western and Chinese investors have expressed their dismay over the government’s intentional delay in awarding upfront tariff for their solar power projects raising questions over the sovereignty of government institutions.
In order to spur investment growth in the renewable energy sector, National Electric Power Regulatory Authority (Nepra) determined the upfront tariff for solar power plants at $14.15 per kWh (unit) for the year 2015, which was significantly low from the 2014’s upfront tariff of $16.31 per unit. For the year 2016, Nepra has proposed the solar power upfront tariff at $9.25 per unit, which has not been finalised as yet.
A notification in July 2015 assured the investors and development firms that the upfront tariff of $14.15 per unit could be accepted by the end of December 2015. A solar power developer informed that after the subject notification, they spent significant amount of money for completing all the paperwork and relevant studies to secure the tariff notified for 2015.
“However, the authorities have employed delaying tactics and are not awarding the tariff to developers,” a solar power developer told The News on condition of anonymity.
“This $14.15 per unit is already the minimum feasible rate and any further reduction in this tariff would make it unfeasible to continue with the projects,” he said.
Commenting on the situation, Minister of Electricity and Power, Khawaja Mohammad Asif said they were reviewing the situation.
We are reviewing the tariff and grid availability and after the review is complete, the tariff might be awarded to the intending companies.
Around five applications are lying with the Nepra suggesting acceptance of solar power upfront tariff, of which one is also included in the China-Pakistan Economic corridor (CPEC), and government’s apathy towards the worries of foreign investors would send a bad message to the international community.
Nepra’s Member Tariff

Khawaja Muhammad Naeem announced that the proposed tariff of 9.25 cents would be applicable from January 2016 and the companies that were awarded the existing tariff would have to accept the revised tariff from 2016.
Representative of a solar power company, attending the solar power conference, said that the concerned authorities were acting against the ethics. The companies that had completed all requirements should be awarded tariff, as “delaying the process on one pretext or another to pass the time was unethical and immoral”.
A local company working with a foreign developer said the conference would serve no purpose in attracting new investors, adding that the companies who already had received letter of intent were planning to leave.

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