ISLAMABAD: The Private Power and Infrastructure Board (PPIB) has given the green light to executing a coordination and indemnity agreement between the federal and Sindh governments for projects of independent power producers (IPPs) in the province.
For the purpose, a draft of the agreement will be sent to the Sindh government through the Ministry of Energy (Power Division) and after its finalisation it will be examined by the Ministry of Law and Justice before execution.
The approval was given at the 114th meeting of the PPIB held on Wednesday under the chairmanship of Federal Power Division Minister Sardar Awais Ahmed Khan Leghari.
The agreement covers the projects in relation to which the Sindh government has signed land lease and water use agreements with the IPPs. The federal government covers the risk of default in the implementation agreement.
The power minister emphasised that the agreement should be finalised within one month.
He was of the view that investors in the power sector were feeling the friendly environment as their cases were being processed on a fast track due to frequent meetings of the PPIB.
PPIB Managing Director Shah Jahan Mirza briefed the meeting that in order to encourage sustainable energy production, the board was handling seven projects of cumulative 5,600-megawatt capacity.
The PPIB discussed an interim agreement, approved by the Economic Coordination Committee (ECC), for re-gasified liquefied natural gas (RLNG) supply to four gas-based IPPs including Halmore, Saif, Orient and Sapphire.
Owing to unavailability of gas, these projects had been running on expensive high-speed diesel. The consumption of imported LNG in place of diesel is expected to bring down the fuel cost to almost half, leading to a considerable reduction in the power tariff.
National Transmission and Despatch Company managing director made a presentation on the Matiari-Lahore high-voltage direct-current (HVDC) power transmission line, electricity flow from the IPPs based on Thar coal from south to north and its financial impact.
The minister emphasised that the government had been instrumental in realising the electricity potential as energy played a vital role in improving socio-economic growth of the country.
“We are committed to providing affordable electricity in the most efficient manner to every consumer for which we have taken concrete steps and will continue the spirit in future as well,” he said.
Next huddle in Thar
Responding to the minister’s proposal, the PPIB decided to hold its next meeting in Thar in the second week of February in a bid to assess coal assets of Pakistan.
PPIB members will also take stock of the projects that are at different stages of implementation in the coal-rich Thar deserts. This is expected to provide first-hand knowledge and facilitate right decisions relating to the Thar coal projects.
Published in The Express Tribune, January 18th, 2018.