K-P to stop building solar projects using hydel funds

HDF will now exclusively used for hydel projects as mandated in its act

PESHAWAR: The provincial government has decided that it will no longer use money from the Hydel Development Fund for non-hydel projects, in what is a reversal of its policy from its last tenure.

In this regard, a number of solar-powered projects, which were previously set to be financed using the fund, will now be handed over to the respective department to fund.

This decision was taken by the Khyber-Pakhtunkhwa (K-P) government recently in a meeting of the Hydel Development Fund (HDF) board. The meeting had been chaired by K-P Chief Minister Mahmood Khan.

Sources privy to the development told The Express Tribune that K-P Finance Minister Taimur Saleem Jhagra told the board to remove all projects from the HDF and that the HDF shall only be used for financing hydel development projects while projects involving other energy generation modes shall be separated from it.

“All the solar projects will now be financed from other resources, not from the HDF. Their cumulative cost was around Rs4 billion and this massive sum of money was to be deducted from the HDF, which is purely been established for hydel development,” an official of the K-P government said.

The government had earlier decided to finance a number of solar projects across the province from the fund including solarisation of 4,000 mosques across the K-P.

“The fate of this project will be decided later, maybe the K-P Local Government or the K-P Zakat and Usher departments will execute the project and the K-P Energy and Power Department — which had been tasked to execute the project — will now provide them technical assistance in the project,” the official added while requesting not to be named.

A tender for the Rs700 million project had already been issued by the K-P government and, however, groundwork on it had yet to begin.

Similarly, a project for solar electrification of schools in the province will now be handed over to the K-P Elementary and Secondary Education Department (K-PESED) who will be responsible for financing it and executing it.

Similarly, a project for the solar electrification of basic health units (BHUs) across the province will be given to the K-P health department.

The official said that that under the two projects as many as 8,000 school and 187 BHUs were supposed to get financing from the HDF for installation of solar-powered systems.

“It is a good initiative to save money for hydel development projects which generate cheaper and greener energy in the province,” the official said.

The provincial government had issued ordinances to alter the HDF Act 2006 to remove bars from spending the money kept in the HDF fund for purposes other than hydel development.

Under the Section-3 (4) of the act, the fund can only be utilized for hydel development, however, the Pakistan Tehreek-e-Insaaf (PTI) led K-P government in its previous tenure borrowed money from the fund to finance a number of projects.  But with the ordinance now expiring, the act has returned to its original shape, the official said.

The move could also have been precipitated by the focus of the federal government on two major hydel projects in the country, primarily the Diamer-Bhasha and the Mohmand dams. Amidst a cash crunch, the decision could mean focusing funds specifically for the projects.

Published in The Express Tribune, September 14^th, 2018.