Water and Power Minister Liaquat Ali Jatoi on Tuesday cleared the draft of first ever Renewable Energy Policy for submission to the Economic Co-ordination Committee (ECC) of the cabinet for final approval, envisaging mainstreaming of renewable energy employing small hydro, wind and solar technologies in the development plans.
The draft of the policy was discussed and finalised at a meeting, chaired by the minister. Liaquat Ali Jatoi said the policy offers very liberal and attractive incentives for attracting investment in renewable energy sector.
He said the government has decided to use all other options to generate electricity to meet the demand growing 10 to 12 percent annually in the country, appreciating the role of the ministry secretary, AEDB, and PPIB for preparing policy, and hoped that it would go a long way in strengthening and improving power supply position.
Earlier, Water and Power Secretary Ashfaq Mahmood and AEDB Chairman Air Marshal Shahid Hamid (Retd) gave a detailed briefing on the policy, and said the policy comprising three phases, short-, medium- and long-term measurers.
Giving the salient features of the policy, Ashfaq Mahmood said it invites investment from the private sector for four categories, (a) Independent power projects (IPPs) for supply of power to grid only, (b) Captive-cum-grid spillover power projects (ie self - use and sale to utility), (c) Captive power projects (ie self or dedicated use), and (d) Isolated grid power projects (ie small, stand-alone).
To encourage generation through renewable resources, small projects for self-use will not require any permission from the government, and will also be able to sell surplus power to Discos under the policy.
It will be made mandatory for the National Transmission and Dispatch Company (NTDC) and Central Power Purchase Agency (CPPA) to purchase electricity from renewable energy resources projects.
The policy will allow an investor to avail the facility of delivering power on the existing infrastructure and receiving equivalent power for use at location of its choice. The small renewable energy projects will not require tariff determination from Nepra. It has been allowed that wind and solar projects irrespective of size of plants (even more than 50 MW) will be dealt by the AEDB.
Giving details of the financial incentives to the investors, he said among others, it is also allowed that no customs duty or sales tax would be levied on machinery equipment and spares meant for the initial installation or for BMR or expansion after commissioning of projects for power generation utilisation renewable energy resources. The exemption has been allowed from income tax, including turnover rate tax and withholding tax on imports of machinery and equipment.
The investor is allowed to issue corporate registered bonds. The permission to issue shares has also been granted under the policy at discounted rates to enable venture capitalists higher rates of return proportionate to the risk.
Non-residents investors were allowed to purchase securities issued by Pakistani companies without the permission of the State Bank of Pakistan, subject to prescribed rules and regulations.