ISLAMABAD: The Saudi Ministry of Energy has reportedly questioned the necessity of a new agreement for the development of renewable energy projects in light of an existing Memorandum of Understanding (MoU) with Pakistan. According to informed sources within the Ministry of Foreign Affairs (MoFA) speaking to Business Recorder, the Saudi authorities have raised doubts over the need for a new pact, citing the prior agreement signed during the visit of the Saudi Crown Prince to Islamabad in 2019.
Sources revealed that Pakistan’s Mission in Riyadh forwarded a draft agreement to the Saudi Ministry of Energy for consideration. However, during informal discussions, Saudi officials expressed their view that the existing MoU adequately covers cooperation in renewable energy projects. They highlighted that their technical experts are currently reviewing both drafts for comparison and will provide an official response accordingly.
In response to Saudi Arabia’s initial stance, Pakistan’s Mission in Riyadh has offered the following suggestions after analyzing both the existing 2019 MoU and the draft “G2G Framework Agreement on Cooperation in the energy sector”:
The 2019 MoU serves as a framework agreement allowing for the development of renewable energy projects by Saudi investors, in alignment with Pakistan’s national laws and regulations.
Consideration could be given to amending the 2019 MoU to include references to Pakistan’s “Inter-Governmental Commercial Transaction Act 2022” if necessary.
Provisions for amendments and formation of joint monitoring teams are already outlined in the 2019 MoU, ensuring effective implementation.
Specific details mentioned in the draft agreement could be incorporated into commercial agreements, particularly those pertaining to financing, which falls beyond the jurisdiction of the Saudi Ministry of Energy.
The Ministry of Foreign Affairs has indicated that Pakistan’s Mission is seeking input from the Special Investment Facilitation Council (SIFC) and the Ministry of Energy to address Saudi Arabia’s concerns and determine the way forward.
Story by Mushtaq Ghumman
