Global renewable energy investors are increasingly looking to South and Southeast Asia, lured by lucrative incentives announced by governments in the region, as the outlook for clean energy investment in Europe and US remains bleak.
In Pakistan, the Turkish Zorlu Energy Group is building a $144 million, 54.6 megawatt (MW) wind power project with the Asian Development Bank, the World Bank and Pakistan’s Habib Bank Limited helping to fund the venture. Nordex SE, an international firm that specializes in wind turbines, has announced that it has signed supply and service contracts in Pakistan for wind farms with a combined capacity of 250 MW.
The China Three Gorges Group has similarly signed three separate wind power deals with Pakistan, the wind turbines for which will be supplied by the China Xinjiang Goldwind Science & Technology Company Limited.
While investment opportunities in South and Southeast Asia may be new, accompanying problems are not unfamiliar. Investors complain of confusing regulatory frameworks and complicated tax and labour laws. Weak infrastructure drives up costs for project developers, and inefficient power grids discourage deployment of renewable energy in areas requiring power supply. Competition is also toughening up, with local companies willing to slug it out with international players.
Published in The Express Tribune, February 9th, 2012.
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