The introduction of a wholesale electricity market in Pakistan will attract more Chinese investment in the renewable energy sector of the country, an investment expert said.
The National Electric Power Regulatory Authority (Nepra) on June 6 awarded market operator licence to Central Power Purchasing Agency-Guarantee (CPPA-G) under the Competitive Trading Bilateral Contract Market (CTBCM) initiative. The new regime allows large consumers of one megawatt or above to directly purchase electricity from the generation or transmission company of their choice at mutually agreed tariffs and terms and conditions.
The new regulations will also allow generation companies to supply electricity to their clients via existing transmission lines in case of remote generation facilities.
Pakistan was struggling for the last 30 years to implement this regime, Nepra said.
CTBCM will open Pakistan’s power sector, especially the renewable energy market, to international investors.
Since Chinese renewable energy firms are already involved in several solar and wind energy projects in Pakistan, they will be able to play a lead role as they have better knowledge of the local market dynamics, an investment analyst with Dubai-based Burj Capital said.
He said that as Chinese firms are executing larger projects, they will engage local firms for smaller projects, thus expanding opportunities for Pakistani companies as well.
For example, Huawei is already establishing its mark in the Pakistani market with its solar inverters by providing quality devices at affordable costs, the analyst said.
Similarly, other Chinese firms will also enter the market after the introduction of CTBCM, he added.