Prime Minister’s Office (PMO) has given the deadline of a couple of weeks for mapping 6000-MW solar projects across the country and proposed tariff along with indexation to attract international investment.
These directions were issued at a meeting on September 5, 2022, presided over by Special Assistant to Prime Minister on Effective Governance, Dr. Jehanzeb Khan, a close relative of Azam Khan, who was secretary in the government of Imran Khan.
The meeting was attended by MD PPIB, Director AEDB, Joint Secretary Finance Ministry, senior energy specialist of World Bank, member PCRWR in person while representatives of Planning Commission, NEPRA, NTDC and CPPA-G joined on Zoom link.
The meeting decided that draft policy framework to be prepared and reviewed by independent/ external experts may be submitted within two weeks. Security documents prepared by PPIB (currently being reviewed by the USAID) may be shared with the participants of consultative workshop/ pre-bid conference scheduled on September 13, 2022.
Power Division/ PPIB to share the timelines for final approval of draft policy framework from the competent forum, i.e., CCOE, ECC and Cabinet. These approvals will be obtained in one month.
The meeting gave one month deadline to Power Division for preparation of policy documents to initiate the process of solarization of public buildings. PPIB would prepare documents to be vetted by international experts.
During the meeting PPIB highlighted that indexation is compulsory for investment attraction, proposing 70% indexation of tariff and O&M for the solar projects funded by foreign investments under the new initiative. National Electric Power Regulatory Authority (NEPRA) stated that according to current policy mechanism, bidding can be done by the provinces.
The power regulator also highlighted that a single line tariff along with indexation of years will be calculated.
The SAPM gave two weeks time to Power Division, Chairman NEPRA and CEO AEDB for submission of mechanism on indexation.
The meeting also decided that various financing avenues and modalities identified by the World Bank may be explored. AEDB would coordinate with World Bank to get complete cognizant of financial model used by the WB projects in Sindh. Power Division/ AEDB will coordinate with Ministry of Climate Change to ascertain the funding availability under Green Energy and Climate Change regimes with various international financial institutors. This task will be accomplished in two weeks.
According to WB, some possible options for WB support for example may be USD Credit Line, guarantee instruments, CAPEX financing, financing for shared infrastructure for solar/ wind projects in Balochistan, and grant-funded technical assistance for Discos. Power Division/ AEDB will coordinate with World Bank team to develop a concept paper to apply for the funding through EAD.
During discussion on repayment mechanism for solar initiatives, the meeting decided that payments to the IPPs (under this initiative) will be directly debited on the CPPA-G bank accounts which will alleviate the need for issuance of GoP guarantee and provide commitment to the IPPs for payment after 60 days. Currently various options are being reviewed at Ministry of Finance (MoF).
The meeting asserted that CPPAC-G and MoF need to carry out a detailed assessment on various implementation aspects (financial, legal and administrative) of payments vis-à-vis existing IPPs and finalize the payment mechanism within three weeks.
Furthermore, Power Division/ PPIB would share a complete process flow of the payment mechanism to the new IPPs (establishing solar projects) in one week.
Compatibility of the initiative with IGCEP and operational aspects of the existing thermal projects also came under discussion. The meeting gave two weeks time to Secretary Power Division to sort out issues like intermittent of power requirements, operational requirements, Grid Code Management, etc.
The meeting also gave two weeks to Secretary Power for comprehensive study about identification of various operational, financial, administrative and legal risks of the solar initiatives and required strategies to mitigate it. PPIB has been directed to map each and every project established under 6000-MW capacity.
Mapping may show the exact location of the project and also identify the availability/ readiness of power evacuation infrastructure.
Power Division/ PPIB is to provide a detailed mechanism on the implementation of the project along with timelines against key milestones immediately.
PPIB is to share with SAPM on Government Effectiveness complete mapping of 6000-MW solar projects along with their specific sites and identification of evacuation arrangements.