Pakistan to approve $1bn for wind energy production

KARACHI: The Alternative Energy Development Board (AEDB) is willing to approve a project proposed by NBT AS, a Norwegian clean energy company that plans to build a “wind corridor” north of Karachi in Sindh.

This was disclosed by AEDB chief executive, Arif Alauddin, to Bloomberg.

Seeking to diversify its energy supplies away from oil and gas and boost electricity production, Pakistan is ready to approve the Norwegian company’s request to build a 150-megawatt wind farm, the first part of a $1 billion plan that could boost the announced capacity for clean-energy power plants by a third.

There is a power deficit of 3.6 gigawatts a day, triggering 12-hour blackouts that cause riots and closure of factories across the country.

“They told us saying they have got money and relationship with Chinese and they want to invest,” Alauddin said.

“As soon as they pay the fee, we will issue that letter to them. We will be able to give them land if we can see they can deliver.”

Pakistan has almost 1 gigawatt of projects under construction or with financing agreed and 498.5 megawatts more of wind programs announced, according to Bloomberg New Energy Finance data. Only 6 megawatts of wind energy facilities are operating.

NBT CEO Joar Viken said he plans to tap financing for his project from one of three Chinese turbine makers that his company is talking with about supplying machinery for facilities.

“We think Pakistan is a very good environment and has a very good framework,” Viken told Bloomberg in a phone interview from New York. “Because we get everything in US dollars, we don’t have a huge currency risk.”

Viken said NBT would issue a tender to Goldwind Science & Technology Co., Sinovel Wind Group Co. and China Energine International Holdings Ltd. (1185) to supply turbines.

These companies have a credit line with the state-owned lender, the China Development Bank Corp.

“Goldwind now is actively seeking more cooperation opportunities with domestic as well as foreign wind farm developers to expand Goldwind’s presence in overseas markets,” Thomas Yao, a spokesman for the company, said in an e-mail.

“Norway’s NBT AS is among the international opportunities we are currently considering.”

A spokesman for China Energine, who asked not to be named in line with company policy, said he didn’t know about the talks and can’t comment.

Officials at Sinovel couldn’t be reached.

The financing arrangements are “feasible” because Chinese turbine makers would not develop projects themselves, said Eduardo Tabbush, an industry analyst at Bloomberg New Energy Finance in London.

“This is something we’ve seen happening more and more,” he said.

NBT envisions developing as much as 650 megawatts of wind power in Pakistan over next few years.

It purchased land suitable for 50 megawatts in Sindh province and is seeking partnership with Z. A. Bhutto Institute of Science & Technology (ZABIST) in Karachi, for land for other 100 megawatts, Alauddin said.

Alauddin said NBT has proposed to install as much as 250 megawatts of capacity over the next two years.

AEDB is working “very hard” to provide Norwegian company with an “upfront tariff” that will help guarantee a price for power sold from wind farms. The last tariff it approved was worth about 13 US cents a kilowatt per hour.

AEDB could approve an additional 500 megawatt project if NBT is able to line up funding from a Chinese partner where it has existing wind developments.

Copyright PPI (Pakistan Press International), 2011