Small renewable energy projects in IGCEP: HEPA seeks PM’s support for inclusion

ISLAMABAD: The Hydro Electric Power Association (HEPA) has sought Prime Minister Shehbaz Sharif’s support for the inclusion of small renewable energy projects of up to 20 MW with Letters of Intent (LoIs) or Letters of Support (LoS) in the upcoming Indicative Generation Capacity Expansion Plan (IGCEP), well-informed sources told Business Recorder.

In a letter to the Prime Minister, Vice Chairman of HEPA, Syed M Hussain Gardezi, emphasized that small-scale renewable energy projects have significant potential to contribute to the country’s energy mix.

These projects can provide sustainable and decentralized power solutions, particularly for remote and underserved areas, reducing line losses due to long-distance transmission lines and enhancing energy security.

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However, the current regulatory framework and strict approval criteria often pose challenges for the development of such projects, discouraging local investors and lenders from participating in the renewable energy sector.

HEPA urged the government to consider the following measures to accelerate the transition to a cleaner and more resilient energy system: (i) Relax the stringent criteria for the approval and integration of small renewable energy projects into the national grid ;

(ii) Simplify administrative and financial procedures to encourage participation from small businesses, startups, and local entrepreneurs; and

(iii) Ensure policy inclusivity by allowing small renewable energy projects up to 20 MW to contribute meaningfully to national energy planning.

Gardezi believes that by adopting these measures, the government can foster a more inclusive and dynamic renewable energy sector, leading to economic growth, job creation, and environmental sustainability.

“I hope that you will consider this request and take the necessary steps to promote small-scale renewable energy development in our country. Your leadership in this regard will pave the way for a greener and more energy-secure future for all,” Gardezi said in his letter to the Prime Minister.

The letter comes at a time when the government is about to finalize the IGCEP 2025-35, which currently focuses solely on committed ongoing renewable energy projects or the conversion of imported coal projects to Thar coal.

According to insiders in the Power Division, the government will only accept ongoing projects of about 10,000 MW out of 17,000 MW.

Recently, the Power Division refused to accept 350 MW solar projects from the Water and Power Development Authority (WAPDA) planned to be set up on water in the Tarbela and Ghazi sites. Likewise, hydropower projects from Korean companies are also in limbo due to a sudden shift in government plans.

“I request the Prime Minister to consider the inclusion of small renewable power projects with LoIs/LoS issued by federal entities in the IGCEP, ensuring that these initiatives are not hindered by overly stringent criteria,” Gardezi maintained.

Power Minister Sardar Awais Ahmad Khan Leghari has publicly stated, both in recent remarks and in Standing Committees of the Senate and National Assembly, that he would not accept expensive projects. If the government wishes to proceed, these should be funded by the Public Sector Development Program (PSDP), not by consumers.

Last week, Secretary of the Power Division, Dr Fakhray Alam Irfan, acknowledged that Pakistan’s generation capacity will exceed its demand in the coming years.

Copyright Business Recorder, 2025