Renewable energy: Govt likely to waive duty on equipment import

Published: March 7, 2012

At present, there is no import duty on complete renewable energy plants but investors have to pay duty if they import parts. PHOTO: FILE

ISLAMABAD: 

In a move that is likely to be welcomed by consumers and power producers alike the government is likely to waive off duties on import of parts of renewable energy plants in the upcoming budget in a bid to attract investment.

The proposal was discussed in a high level meeting chaired by Prime Minister Yousaf Raza Gilani to review Renewable Energy Development Projects here on Tuesday at the Prime Minister House.

At present, there is no import duty on complete renewable energy plants but investors have to pay duty if they import parts. The Alternative Energy Development Board (AEDB) has submitted proposals to the Ministry of Finance which will be examined and if approved will be announced in the budget in June. Sources told The Express Tribune that the prime minister directed Dr Abdul Hafeez Sheikh, Minister for Finance to examine the proposals.

During the meeting, it was also decided to launch the pilot project of bio-diesel by Pakistan State Oil (PSO) which will have the support of the AEDB and the government of Baluchistan.

“We have already seen the benefits of bio-diesel when a car powered by bio-diesel covered a distance of 40,000 kilometres in Pakistan,” a senior government official said, adding that the Economic Coordination Committee (ECC) has targeted the completion of the bio-diesel project by 2020, which will save Rs2 billion annually.

Sources also said that the prime minister had directed that AEDB be turned into a financially viable entity by forming a trust fund. The idea would be that AEDB will contribute to this fund by charging for services but the plan is still in its initial stage with many details yet to be finalised.

Meanwhile according to a statement Prime Minister Yousaf Raza Gilani said that the government has initiated a number of projects in the power sector to overcome the energy shortage in the country. He said that apart from hydel power generation, the country possessed enormous potential of power generation through other renewable energy resources of wind, solar, geo-thermal and biofuel energy. He said that wind energy could produce 350,000 MW, solar 2.9 million MW and geo-thermal 2,500 MW.

Arif Allaudin, Chief Operating Officer of the AEDB said that in view of the vast potential of renewable energy in Pakistan, they have so far received offers of private sector investment to generate 1,500 MW of electricity through these resources.

The CEO apprised the meeting that projects of 400 MW would start this year and the units would start generating electricity early next year.

He said that the project of 150 MW of wind Jhampir in the province of Sindh, is already under construction and would start operation during the first half of 2012.

The Waste to Energy sector projects are under various stages of development and will start production of electricity in the next two years.

The prime minister also said that villages that were located at a distance from the national grid will be proved solar electricity.

The prime minister also said that off-grid application like solar water heater, biogas and water pumping be implemented through renewable resources.

Published in The Express Tribune, March 7th, 2012.

Reader Comments (5)

  • khan
    Mar 7, 2012 - 11:21AM

    laughable… this will flood the market with cheap low quality chinese imports, and will kill the local industry even before it takes off. We our lucrative sectors to master chinese in a platter. In comparison, India which produce 40,000 MW hydro, 20,000 MW wind and 2000 MW solar is RAISING import duties to make sure local companies get bigger and create local jobs. Result, companies like L&T, BHEL emerge as billion dollar heavyweights in Asia, while those like Suzlon are among top 5 globally in wind, and some 12,000 MW solar is getting implemented by 2015! All local companies, local components, local jobs. this is once again a bad decision.. which is nothing unusual in this country.

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  • Lobster
    Mar 7, 2012 - 2:54PM

    Idiotic.

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  • Cautious
    Mar 7, 2012 - 10:07PM

    Inexpensive solar panels from China will help Pakistan’s energy crisis – a move you should have done a long time ago.

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  • John B
    Mar 8, 2012 - 12:59AM

    Overall a good policy, but requires enormous capital investments.

    The cheapest to implement is biodiesel but the source oil and approach have to be well researched for every nation. otherwise, PAK agrarian land will be converted for oil crops. As PAK slaughters lot of animals, animal fat based biodiesel pilot plant schemes is a good start. However converting biodiesel to electricity generation is economically a sound macroeconomic policy for PAK than burning them in tail pipes.

    PAK has to import the equipment, spare parts, and technical man power in wind energy, and solar energy sector since she lacks the infrastructure and the policy has to be fine tuned with domestic small and medium scale industries’ growth.

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  • Interconnect Partners
    May 4, 2012 - 8:34PM

    In agreement with comments of Khan. Hope the finance Ministry will consider waiver of duty, sales tax in this budget. Local establishment of manufacture of PV panels, invertor should be imported from established sources as Germany etc. and later produced locally. All raw material is locally available for solar.

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