Floating solar project: World Bank invites Pakistan to hold talks on $341.5m loan

ISLAMABAD: The World Bank (WB) has invited Pakistani authorities for negotiation of $341.5 million loan to set up 300-MW floating solar project at Tarbela - Ghazi Barotha complex, official sources told Business Recorder.

The Floating Solar Projects (FSPs) will supply zero emission electricity to meet peak daytime demand in summer and facilitate storage of water in the Complex to meet peak demand in the winter. The proposed project focuses not only on deployment of the first FSPs but also on technology transfer, innovation, research, and technical capacity building for hybrid operation of solar and hydropower.

The World Bank’s Acting Country Director, Gailius Draugelis in a letter to Secretary Economic Affairs, Mian Asad Hayat-ud-Din stated that on behalf of the International Bank for Reconstruction and Development (IBRD) and the International Development Association (IDA) collectively, the World Bank, is inviting Pakistan (Borrower) and the Water and Power Development Authority (WAPDA) to negotiate the proposed IBRD loan and IDA credit for the Floating Solar in Pakistan Project.

The cost of the Project is $346-5 million, of which $341.5 is proposed for financing by the World Bank and $5 million will be financed by WAPDA, as the Project Implementing Entity.

World Bank, Wapda holding talks on setting up of 300MW floating solar project

The negotiations package mentions an indicative allocation of $170.5 million as a loan from IBRD and $171 million (equivalent in Standard Drawing Rights) as credit from IDA. These allocations will be adjusted prior to or during the negotiations based on the agreement between the Ministry of Economic Affairs, WAPDA, and the World Bank. The World Bank Acting Country Director has proposed that negotiations should take place at the World Bank Office Islamabad at a convenient date between May l0 and May 17, 2022.

The proposed project’s development objective is to increase clean energy from the Tarbela-Ghazi Barotha Complex, through the development of climate-smart, innovative floating solar and hydropower hybrid operations, to meet peak demand in Pakistan. The proposed project will finance the installation of two 150 megawatts floating solar plants and their short interconnections to transmission infrastructure in the Tarbela Ghazi-Barotha Complex, environmental and social management instruments’ implementation, project management costs, and technical assistance activities.

As part of the negotiations, the following documents will be discussed: (i) Draft Project Appraisal Document (PAD); (ii) Draft IBRD Loan Agreement; (iii) Draft IDA Financing Agreement; (iv) Draft Project Agreement; (v) Draft Disbursement and Financial Information Letters (DFILS), Interim Financial Reports (IFR) and Environment templates; (vi) Social Commitment Plan (ESCP); and (vii) Procurement Plan.

The project will not acquire land, and FSPs will be deployed in the built-up areas of the Complex. Environmental impacts are minimal, localized, and manageable or reversible. The Bank maintains that investments for power generation in hydropower, solar PV, and wind, as well as, in transmission infrastructure in Pakistan are often considerably delayed due to difficulty in acquiring privately-owned land. Land acquisition in Pakistan is expensive and complicated. The reservoirs, ponds, and canals used for publicly owned hydropower and irrigation infrastructure are; therefore, great sites for development of solar generation. The additional cost of floating systems can be equivalent to savings in cost and delays in land acquisition. Solar panels also operate more efficiently on water bodies.

Copyright Business Recorder, 2022