ISLAMABAD: The Sindh Energy Department (SED) has submitted a revised PC1 to the Planning Commission that seeks to extend the “Sindh Solar Energy Project” worth $105 million, reallocate funds between components, and introduce a number of flexibilities to help smooth implementation going forward.
Official documents revealed that the rating for overall implementation progress has been maintained as “Moderately Unsatisfactory” to reflect the continued implementation delays and the corresponding slow rate of disbursement under the project.
The project was approved by the World Bank’s Board of Executive Directors on June 14, 2018, and became effective on January 9, 2019, with the objective to increase solar power generation and access to electricity in Sindh.
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The first disbursement was made into the designated account in September 2019, but due to significant delays in implementation (including as a result of the Covid-19 pandemic and related restrictions) the project is significantly behind its implementation schedule with tangible results under just one of the four components.
Under Component 1, there is limited on-the-ground progress to report, but competitive bidding is expected to be initiated soon for three sites through two separate Request for Proposals (RfPs). The first site, located in Jamshoro district, was approved under the Indicative Generation Capacity Expansion Plan (IGCEP) 2021-2030 for 50 MW of utility-scale solar, for which the power off-taker will be the federal Central Power Purchasing Agency (CPPA).
The second and third sites are being developed under a Memorandum of Understanding that was signed in December 2021 between the Sindh Energy Department (SED), the K-Electric (KE), and the World Bank (WB) for the sourcing of 350 MW of solar capacity under the project, with KE as the power off-taker. The RFP for all three sites is currently with the National Electric Power Regulatory Authority (Nepra) for the determination of a “benchmark tariff”.
There has been some further progress made by SED under Component 2, with the commissioning of 25 sites (12.97 MW) for the installation of solar power on the rooftops of public hospitals, leaving only seven sites to be completed. A second round of procurement has been completed for the supply and installation of at least 10 MW of solar capacity on and around other public buildings in Sindh, while further rounds of procurement are currently being planned.
Under Component 3, sales and installations of solar home systems (SHS) have stalled since initial sales were made in late 2021 and 2022, with just 439 SHS sold by two different approved suppliers. Unfortunately, progress under this component has stagnated since the second half of 2022 and has been further impacted by the severe floods in the summer of 2022 and the import restrictions imposed by the federal government.
The SED has proposed a number of potential solutions to address these challenges, with the aim of getting this component back on track within the next six months. There has been limited implementation under Component 4, although the training of 300 solar technicians has been completed. It is proposed that the majority of funds under this component be reallocated to Component 2.
The rating for progress towards the achievement of the Project Development Objective is maintained at “Moderately Satisfactory”, reflecting the reasonable likelihood that most or all of the project’s desired results can be achieved, with some shortfalls, if the implementation is accelerated. The project also has the potential to significantly exceed the originally envisaged results under Component 2 by reallocating funds from other components.
The WB has provided guidance and agreed on a set of actions to get the project back on track. Full and accelerated implementation of the project would contribute to the urgent need to increase solar power capacity within the country. This would help offset imported fuel, reduce the overall cost of generation, and provide reliable electricity to households in Sindh province.
SED has also prepared and submitted a revised PC-1 to the federal Planning Commission that seeks to extend the project, reallocate funds between components, and introduce a number of flexibilities to help smooth implementation going forward.
Copyright Business Recorder, 2023
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