JV with Chinese solar firm to bring $700m in investments
The shift towards electricity generation through solar energy is becoming a rising trend in Pakistan, driven by the soaring prices of electricity, which domestic, commercial and industrial users are paying through different distribution companies, haunting the public at large.
Though the trend of installing solar panels by households is not new, many owners previously tended towards this cheap mode of electricity provision, and some are also benefiting from reverse metering.
This fast-paced development is likely to further speed up, as governments are now also looking towards solar energy to provide cheap electricity to low-income households. Provincial governments like Punjab have successfully penetrated solar energy panels in rural areas, largely to operate tube wells, which previously were operated on costly diesel fuel.
Against the backdrop of such developments, many companies are now looking to enter and invest in this lucrative market, either independently or via joint ventures. However, Chinese companies apparently are taking the lead in this race.
In the latest development, a Chinese company, Hanersun Technologies, has entered into an agreement with a local company My Energy to collaborate for the provision of 500 MW solar system projects.
Under the terms, an investment of $700 million will be made for the joint venture involving different 500 MW solar projects. This will include the establishment of distribution networks, dealer’s network, warranty and service centres, as well as flagship stores.
Read: Chinese solar firm eyes growth in Pakistan
My Energy, CEO, Tariq Wazir Ali emphasised the importance of providing sustainable energy solutions in the country. “Pakistan currently relies heavily on expensive furnace oil and diesel for electricity generation,” he said. There is a potential for significant cost savings and the need to shift towards cleaner energy sources such as solar power, he added.
Ali also stressed the importance of focusing on the steel and agriculture sectors in terms of solar energy solutions. He announced plans to complete several 500 MW projects under the joint venture within the first year of this JV.
Hanersun Technologies, Vice President, Sunny Sun acknowledged the lack of quality solar energy products in Pakistan and expressed the company’s commitment to working with the local counterpart to address this issue. “This JV aims to offer affordable energy solutions to the people of Pakistan and promote sustainable energy practices in the country,” he said.
Energy sector experts said that there is a dire need for the introduction of high-tech solar solutions in Pakistan. They said that energy prices are not likely to come down; in fact, there is a high probability that the per unit cost of electricity and gas will further increase due to International Monetary Fund conditions. People by and large are looking to control at least their electricity bills via solar energy.
However, they warned that people may lose hope if they may not be able to get reliable and long-lasting solar energy solutions. “Solar energy is not a cheap product; the decision to install solar solutions may wipe out savings, especially for households. Government institutes should also initiate checks and balances on companies offering such solutions with price control mechanisms, besides promoting this sector, so that the desired results may be achieved,” suggested the experts.
Published in The Express Tribune, March 12th, 2024.
Like Business on Facebook, follow @TribuneBiz on Twitter to stay informed and join in the conversation.