Renewable energy: Projects get Nepra exemption

ISLAMABAD: In a major, but split decision, the National Electric Power Regulatory Authority (Nepra) has amended its law to exempt renewable energy projects to be established by the foreign countries under Inter Governmental Commercial Transactions (IGCT) Act, 2022, and those projects which had qualified for IGCEP 2021.

There was stiff resistance from some of the authority members who were against any exemption in the name of committed projects under IGCEP 2021 from the NEPRA Act.

According to sources, it was a split decision and the amendments have been approved by with a majority of three, ie, Chairman Waseem Mukhtar, Member (Law) Amina Ahmed and Member (Khyber Pakhtunkhwa) Maqsood Anwar Khan, whereas, Member (Finance and Tariff) Mathar Niaz Rana and Member (Technical) Rafique Ahmad Shaikh, who represents Sindh, opposed the amendments.

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The sources said since the government and Saudi company ACWA are very close to an agreement for establishment of 600MWp solar project at Kot Addu under the umbrella of IGCT; hence the Saudi side has sought everything in black and white to avoid any confusion for the investors. Some Chinese companies are also under discussion with the government to establish projects under the IGCT.

The draft MoU shared by the Saudi side has been reviewed by the Pakistani side, and the amended draft, duly vetted by the Law Division has already been shared with the concerned quarters.

Regarding the agreement with ACWA Power on the requested incentives, the PPIB has already addressed the queries received from ACWA Power. Updated responses to these queries have also been shared with the Saudi company and Pakistan Embassy in Saudi Arabia.

The PPIB informed that the IGCEP 2024 is currently being finalised. The development of utility-scale solar PV projects under the MoU will be subject to the quantum available in the approved IGCEP and the commercial viability of these projects.

According to the IGCTA, a G2G agreement/MoU outlining the broad parameters and execution mechanisms for the proposed commercial transactions will be negotiated and finalised between nominated entities of the GoP and the foreign government.

The GoP guarantee is part of the Implementation Agreement (IA) shared with the Saudi Side. The IA is an umbrella concession agreement executed in the capacity as sovereign which not only covers and ensures fulfillment of all the contractual obligations of public sector entities of the federal government and the provinces arising out of underlying documents such as EPA, site lease etc but also as a principle document creates obligations on the seller/investors to fulfill its/their commitments to design, finance, engineer, construct, test and commission and at the end of term transfer the Complex under the project agreements.

Another change in the NEPRA Act is related to those projects which qualified for IGCEP 2021. The authority was facing a technical issue that in IGCEP 2021 some projects were committed like those started under the administrative control of PEDO which got stuck. Some projects are 50 per cent completed, whereas, some are about to complete such as Gorkin-Matiltan Hydropower Project (GMHPP) is a run-off the river project.

“We have exempted those projects which were committed in the IGCEP 2021. Almost 400 MW committed projects will benefit from this amendment,” said one of the insiders.

According to the SRO 2720 (I)/2024, in exercise of the powers conferred by Section 47 of the Regulation of Generation, Transmission and Distribution of Electric Power Act, 1997 (Act No XL of 1997) read with all other enabling provisions thereof, the National Electric Power Regulatory Authority hereby notifies the following amendments in the National Electric Power Regulatory Authority (Electric Power Procurement) Regulations, 2022.

In Regulation 1, sub-regulation (3) shall be substituted, with the following:“These regulations shall not be applicable to procurement of electric power falling within purview of the National Electric Power Regulatory Authority (Alternative & Renewable Energy) Distributed Generation and Net Metering Regulations, 2015 or to electric power procurement processed and approved under the Inter-Governmental Commercial Transactions Act, 2022 (Act No. XXX of 2022).”

In Regulation 8, sub-regulation (l)(f) in Explanation (a) the word “and” shall be deleted.

In Regulation 8, sub-regulation (1)(f), in Explanation (b) full stop will be replaced with semi colon, and word “and” shall be inserted.

In Regulation 8, sub regulation (1)(f)), after Explanation (b) following shall be inserted:“(c) committed projects approved under the IGCEP prior to coming into force of these regulations.“

Copyright Business Recorder, 2024