ADB could clear $200 million loan
ADB is likely to clear a loan of $200 million on August 4 to promote renewable energy in Pakistan.
ISLAMABAD:
The Asian Development Bank (ADB) is likely to clear a loan of $200 million on August 4 to promote renewable energy in Pakistan. The loan is targeted at setting up wind and hydropower plants and to incentivise investment in the clean energy sector.
A meeting of the Manila-based donor agency’s executive board is scheduled for August 4 to discuss the approval of the second tranche under the Renewable Energy Development Investment Programme (REDIP) of $510 million.
Five wind energy and other power plants will be set up using the loan. The power plants are expected to add up to 250 megawatts of electricity by the end of 2012. These plants would be owned by independent power producers.
Loans or equities worth up to $670 million are expected to be mobilised from domestic and international investors for establishing these power plants with the help of the loan.
“Otherwise private investment in renewable energy will be too costly or simply will not be available due to current market concern about off-take, technology and other risks associated with the renewable energy sector in Pakistan,” said the ADB.
The tranche is part of a 10-year investment programme from 2007 to 2017. Total cost of the programme is $2.2 billion. The Bank would contribute $510 million which is over one-fifth of what the total programme will cost. It has already released first tranche of $125 million in 2007. The programme envisages attracting $900 million from the private sector and $390 million from the public sector. The government will also arrange to add $400 million from other sources.
ADB estimates show that the power demand has outstripped the supply. Pakistan needs to increase production capacity to 162,590 megawatts by 2030 and it currently stands around 19,000MW. It says that in order to meet the 2030 power needs, Islamabad needs to invest a huge $150 billion in the energy sector.
During the past few years instead of discouraging expensive thermal generation, the reliance on it has increased from one-fifth to approximately one-third of the total energy mix.
Under the 10-year renewable energy plan, total renewable energy generation capacity would be increased to 9,700 megawatts from the existing level of only 180 megawatts. However, the reported misappropriation of billions of rupees in the Alternate Energy Development Board undermines the chances of achieving the ambitious targets.
The plan also envisages that small hydropower plants would be established in Khyber-Pakhtunkhwa; three grid-connected plants ranging from 2.6 to 36 megawatts would be established in the province. In addition to that, three feasibility studies would be carried out to look for feasible plant sites.
In Punjab, according to the plan, five small-to-medium hydropower stations ranging from 3.2 to 7.2 megawatts would be constructed. However, the ADB fears that absence of relevant policies at provincial level may affect the ambitious outcomes under the programme.
Published in The Express Tribune, July 30th, 2010.
The Asian Development Bank (ADB) is likely to clear a loan of $200 million on August 4 to promote renewable energy in Pakistan. The loan is targeted at setting up wind and hydropower plants and to incentivise investment in the clean energy sector.
A meeting of the Manila-based donor agency’s executive board is scheduled for August 4 to discuss the approval of the second tranche under the Renewable Energy Development Investment Programme (REDIP) of $510 million.
Five wind energy and other power plants will be set up using the loan. The power plants are expected to add up to 250 megawatts of electricity by the end of 2012. These plants would be owned by independent power producers.
Loans or equities worth up to $670 million are expected to be mobilised from domestic and international investors for establishing these power plants with the help of the loan.
“Otherwise private investment in renewable energy will be too costly or simply will not be available due to current market concern about off-take, technology and other risks associated with the renewable energy sector in Pakistan,” said the ADB.
The tranche is part of a 10-year investment programme from 2007 to 2017. Total cost of the programme is $2.2 billion. The Bank would contribute $510 million which is over one-fifth of what the total programme will cost. It has already released first tranche of $125 million in 2007. The programme envisages attracting $900 million from the private sector and $390 million from the public sector. The government will also arrange to add $400 million from other sources.
ADB estimates show that the power demand has outstripped the supply. Pakistan needs to increase production capacity to 162,590 megawatts by 2030 and it currently stands around 19,000MW. It says that in order to meet the 2030 power needs, Islamabad needs to invest a huge $150 billion in the energy sector.
During the past few years instead of discouraging expensive thermal generation, the reliance on it has increased from one-fifth to approximately one-third of the total energy mix.
Under the 10-year renewable energy plan, total renewable energy generation capacity would be increased to 9,700 megawatts from the existing level of only 180 megawatts. However, the reported misappropriation of billions of rupees in the Alternate Energy Development Board undermines the chances of achieving the ambitious targets.
The plan also envisages that small hydropower plants would be established in Khyber-Pakhtunkhwa; three grid-connected plants ranging from 2.6 to 36 megawatts would be established in the province. In addition to that, three feasibility studies would be carried out to look for feasible plant sites.
In Punjab, according to the plan, five small-to-medium hydropower stations ranging from 3.2 to 7.2 megawatts would be constructed. However, the ADB fears that absence of relevant policies at provincial level may affect the ambitious outcomes under the programme.
Published in The Express Tribune, July 30th, 2010.