Sindh and Balochistan provinces, which lack technical expertise to identify raw sites for Renewable Energy Development Sector Investment Program (Redsip), have asked Asian Development Bank (ADB) for a technical assistance grant to prepare feasibility studies.
Request of the two provinces has been conveyed to ADB, which has agreed to provide $510 million under Multi-tranche Finance Facility (MFF) to the energy-hungry Pakistan to finance Redsip, Mujahid Sadiq, Director General International Co-operation of Alternative Energy Development Board (AEDB) told Business Recorder on Monday.
He said the Bank, which is likely to accept the request for grant of money that may amount to $0.5 million, as no development had taken place under Redsip in the two provinces since 2004, would send a fact-finding mission to see need, scope and feasibility of the loaning.
Earlier, a stakeholder co-ordination meeting was organised by AEDB in collaboration with ADB on "Renewable Energy Development Sector Investment Program" at a local hotel as a follow up to Project Preparatory Technical Assistance (PPTA).
The PPTA, Sadiq said, was offered by ADB in November 2004 to analyse the renewable energy potential in all four provinces of the country and conduct due diligence of sample subprojects for financing under the ADB commercial lending scheme.
Addressing the post-meeting press conference Mohammad Arif Alauddin, Chief Executive Officer (CEO) of AEDB said North West Frontier Province (NWFP) and Punjab had proposed several small hydropower projects.
After consultations with planning and development departments of the two provinces three sites in NWFP and five sites in Punjab were finally selected as suitable subprojects for the loan financing, he added. He, however, said due to lack of capacity and non-availability of feasibilities, Sindh and Balochistan could not come up with any proposals.
The Monday's meeting, Alauddin said, was organised to plan and strategize for the third and subsequent tranches of the ADB loan. Highlighting the importance of active participation of all provinces to benefit from the Redsip financing facility, he said that the provinces need to make special efforts to identify potential Renewable Energy (RE) projects and carry out feasibility studies, so that such projects could be included in the third tranche. The meeting was attended by representatives from all the four provinces, Ministry of Environment and Alternate Energy, ADB, Economic Affairs Division, irrigation and power departments of Balochistan, Punjab and Sindh, Karachi Port Trust, UNDP Wind Energy Project and Ministry of Water and Power.
All the stakeholders presented progress reports on their ongoing projects under the 1st tranche and also proposed potential projects for future tranches. Giving historical details of the $510 million ADB loan, the CEO AEDB recalled that the loan would be provided for a period of 10 years (2007-2017), tranches of which, would be made available on the basis of Periodic Financing Request (PFR).
He said the first tranche worth $115 million for the first 08 subprojects was approved by ADB on 13th December 2006 and became effective on 29th November 2007 after approval of the government.
The remaining amount remained available for other new public sector RE projects that fulfil the ADB selection criteria, he said adding that in the intervening period all provinces were constantly encouraged to identify potential RE projects and undertake feasibility studies. He said the last joint co-ordination meeting, which was held on March 14, 2008 to identify new subprojects for financing under the tranche, was attended by representatives from the four provinces, Northern Areas and ADB.
During the meeting, he said, water and power department of Northern Areas offered pre-feasibility of six small hydel projects to be included in the 2nd tranche. After due diligence, ADB recommended that the 26 MW hydropower plant at Shegherthang in Skardu and the 4 MW hydropower plant at Chilas were most suitable investment projects to be included in Redsip Project 2, he said. Alauddin said NWFP and Punjab had already planned to undertake feasibility studies of 08 additional new raw sites under the 1st tranche. However, as these feasibility studies would not be ready by September 2008, the deadline for the 2nd tranche, they would now target for the 3rd tranche, added the CEO AEDB.