The Alternative Energy Development Board (AEDB) intends to streamline tariff procedures which will save at least six months and help achieve the government’s target to complete renewable energy projects of 1,000 megawatts this year, says AEDB Chief Executive Arif Alauddin.
Talking to The Express Tribune over the phone on Thursday, Alauddin said after the proposed steps were taken, power producers would know from initial stages about the tariff structure allowed by National Electric Power Regulatory Authority (Nepra).
“Our initial target for this year was to achieve financial close for projects of 400MW capacity,” he said. “But now the government wants us to go one step further and target 1,000MW projects.”
Alauddin said the government had placed no limits on issuance of licences, but it would follow a mechanism for scrutiny of companies before issuing any licence.
Commenting on the Asian Development Bank’s (ADB) announcement that it would launch a $2.25 billion fund for solar energy projects in Asia, he said Pakistan had already got funding offers from the bank, which would be helpful in financing renewable energy projects, like solar panels, wind mills and biomass.
Industry officials blame financial institutions for the slow pace of renewable energy projects, saying the institutions are reluctant to provide funds and term it the single biggest hurdle.
The officials point out that even after ADB’s offer to provide 70 per cent financing for these projects, Pakistan has been unable to arrange rest of the funds mainly because of lack of funds.
On the other hand, banks say that owing to lack of knowledge about this relatively new industry and rising domestic debt, they find it hard to finance alternative energy projects. According to ADB, fast-growing Asian economies rely heavily on fossil fuels. It has forecast Asia-Pacific imports of fossil fuels will more than double between 2005 and 2030, with oil accounting for more than 90 per cent of such imports.
Pakistan imports huge quantity of oil every year costing around $12 billion, making it the largest contributor to the import bill.
Published in The Express Tribune, June 24th, 2011.
More in BusinessGrowers willing to pay GST if rate reduced to 4%