'$700m investment in Pakistan's power sector under way

Power minister says 8,000MW cheap renewable energy will be added to system by 2025

ISLAMABAD: Power Division Minister Omar Ayub Khan said on Wednesday that the wrong policies of the previous governments resulted in the electricity generation at high rates, consequently the power tariff went up in the country.

Addressing a press conference along with Prime Minister's Special Assistant on Petroleum Nadeem Babar, the minister said that around 8,000 megawatts clean, environment-friendly and cheap renewable energy (RE) would be added to the system.

He added that the share of the RE would be increased to 20,000MW by 2030 under the new Alternative Renewable Energy Policy 2019 approved by the federal cabinet. “The share of clean and green energy will be enhanced to 60-65% of the total energy mix by 2030,” he told reporters.

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“The policy is aimed at substantively reducing electricity prices in the future,” the minister said. “The government initiatives will also boost industrial activities in return will enhance exports and create employment opportunities in the country,” he added.

The RS sector offers $40 billion investment opportunities whereas $700 million investment was already pouring in in 12 wind energy projects, he said, adding that solar panels and wind turbines would now be manufactured in the country, for which talks were under way with foreign companies.

The minister blamed the previous Pakistan Muslim League Nawaz (PML-N) government for “killing all RE projects” in order to set up expensive LNG projects. Asked about the issue with Karkey, he said the disputed was resolved with the help of Turkish President Recep Tayyip Erdogan.

“No amount was paid for settlement of Karkey power plant issue,” he said. Replying to another question, the minister said the RE policy would be sent to the Council of Common Interest (CCI) for endorsement.

Regarding performance of the power sector, he said around 80% feeders had been cleared from power pilferage and work for remaining feeders were under process. He added the revenues jumped to a record Rs229 billion – Rs111 billion through system efficiency by curbing power theft and remaining Rs118 billion through tariff determination.

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Nadeem Babar said for the first time, the RE policy draft was prepared after consultation with all stakeholders, including public, experts, provinces and international agencies. It would be one of the best RE policy as cost-plus tariff and upfront tariff etc have completely been eliminated.

“Contract will be awarded through open and transparent bidding,” he said. “Special focus will be on the manufacturing of solar panels and wind turbines locally for which three companies, including a Danish firm, have shown interest.”

He said the government would identify point or place for setting up the projects. Replying to a question, Babar said that no capacity charges would be paid to RE projects. Power Division Irfan Ali was also present on the occasion.