330 govt buildings: PD blames uncertainty over LCs for failure of solarisation plan

ISLAMABAD: Power Division has reportedly held State Bank of Pakistan (SBP) responsible for failure of solarization of 330 government buildings project as there is uncertainty among vendors regarding opening of LCs, well informed sources told Business Recorder.

A senior official of Power Division, sources said, has shared current status of solarization project with the Finance Minister, Ishaq Dar who has already been facing intense criticism across the country for failing to rescue the dwindling economy.

Power Division, in its letter, informed the Finance Minister that Prime Minister chaired Strategic Roadmap Stock take -Energy Conservation on February 1, 2023 and it was revealed that the response to bid for solarization of public buildings was lacklustre. Only one bid was received for solarization of 330 buildings, which too is non-compliant and was rejected.

The reasons, interalia, are uncertainty among the vendors regarding clearance of solar equipment held up at the ports and inability to open Letters of Credit (LCs). PM desired that conducive conditions be created for success of the solar initiative. Finance Minister sought details of consignments of solar equipment held up due to non-clearance.

Power Division is tasked to make necessary changes/ modifications in the RFP documents and standard security package and re-advertised the RFP. Furthermore, Power Division was also directed to squeeze the timelines and strategize the phased rollout of RFP to clear held-up equipment due to non-clearance.

The matter was earlier brought to notice of Finance Minister on January 2, 2023 through a letter. Reportedly, solar industry requested SBP permission to import solar panels/ invertors worth $ 302.172 million in December 2022. Import, was; however, not allowed due to constrained external account.

According to SBP, as on January 20, 2023, imports of solar panels inverters to the tune of $ 20 million ($ 5 million through LC and $ 15 million through other modes of import settlement) are pending with banks.

Finance Minister has been requested that priority be given to the release of solar power equipment currently held at the port and adequate forex provision made for the expected imports in the coming months for successful implementation of PM’s solar power initiative.

The agenda of meeting held on February 1, 2023 was as follows: (i) 10,000 MW solarization; (ii) local production of solar panels; (iii) local introduction of e-bikes; (iv) conical baffles in gas geysers; and (v) energy efficient bulbs and fans.

The meeting directed Nepra to notify the tariff in solar panel generation at 11 KV feeders immediately.

On large-scale solarization project (10,000 MW) meeting was informed that Nepra will approve the RFP documents and determine the benchmark tariff. Power Division was asked to immediately float the RFP and award contract as per timelines once the approved RFP and benchmark tariff is available from Nepra.

The sources said Ministry of Industries and Production (MoI&P) will get approval of the draft policy on “local manufacturing of solar panels & allied equipment” from the competent forums and rollout it for investors/ manufacturers.

MoI&P will share with Prime Minister Office (PMO) the financial analysis (cost benefit) about the economic feasibility of local production of solar panels and allied equipment vis-à-vis incentives being offered under the policy and challenges of current macroeconomic environment.

The sources said Ministry of Industries and Production discussed the various financing modalities for the implementation of local introduction of E-Bikes initiative with the SAMP on Revenue, Tariq Pasha; MoI&P is also in discussion with Poverty Alleviation & Social Division to finalize the proposal.

Once finalized and approved by the competent forums, MoI&P would launch the scheme by March 1, 2023. Furthermore, MoI&P is to coordinate with SBP on resolution of potential issues regarding opening of LCs of F-Bikes/ related equipment.

The meeting was informed that Petroleum Division has initiated the procurement process for the installation of Conical Baffles in geysers/water heaters. PD will complete the procurement process by January 30, 2023. Furthermore, PD is to consider the proposal installation of timer devices in the geysers.

Also, NEECA would investigate the appropriate size/ design of conical baffles and communicate it to SSGCL and SNGPL. Petroleum Division is tasked to also share firmed up timelines with SAPM-Governance Effectiveness on the implementation of the initiative.

Manufacturing of inefficient fans will be discontinued by July 1, 2023. MoI&P to review the demand of small-scale fan manufactures of slashing 5% duty on imported steel sheet required for the energy efficient fans and share firmed up proposal along with timelines in the next stock-take with Prime Minister.

Power Division is to firm up the (financial) proposal on “inefficient fan replacement program” and present it in the next stock-take.

NEECA to revise the building codes/ housing societies by laws in context of energy efficiency/ conservation directions of the PM by March 30, 2023 and present to the PM a firmed up timeline of the implementation plan.

Copyright Business Recorder, 2023