ISLAMABAD: The Private Power Infrastructure Board (PPIB) has urged the Power Division to expedite required approvals of Small Hydropower Projects (SHPPs) as inordinate delay in approval is a disincentive for a private investor.

Managing Director PPIB, Shah Jahan Mirza, in a letter to the Power Division on processing of SHPPs under the Power Generation Policy 2015, stated that following the mandate of the Policy, Standard Security Package Documents comprising of Implementation Agreement (IA), Energy Purchase Agreement (EPA), Water Use Agreement (WUA) and for projects within the AJ&K territory, the GOAJ&K Implementation Agreement (AJ&K IA) were prepared.

The Board of PPIB in its meeting on January 4, 2021 authorized submission of summary for approval of standard documents by the ECC. Accordingly, the draft summary was submitted to Power Division on January 18, 2021. Subsequently, after redressal of several clarifications and receipt of comments from various stakeholders, the final summary was submitted to the ECC by the Power Division on October 4, 2021.

Small hydropower projects unable to arrange financing

The ECC considered the summary and directed the Power Division “to first place the matter before the Cabinet Committee on Energy (CCoE) for consideration and then to the ECC for matters falling within its domain”.

Accordingly, the matter was placed before the CCoE, which deliberated in detail and approved the concept of “take and pay” with “must run” condition with respect to two committed SHPPs under the IGCEP for which Letter of Support (LoSs) have already been issued by PPIB i.e. 7.08 MW Rialli-II and 8 MW Khattai-lI hydropower projects, both located in AJ&K. However, the accurate decision of the CCoE could not be reflected completely in the minutes. According to Managing Director, reportedly Power Division also took up the matter for clarification of CCoE’s decision with respect to clearance of standard documents by the CCOE for two SHPPs.

On the other hand, Power Division on November 29, 2021 requested Nepra’s views/comments with regard to standard documents in view of its tariff determinations for SHPPs and observations of the CCoE.

The approval of the security package documents has been outstanding for a very long time and due to this inordinate delay the timelines of critical milestones under the respective LoSs of the projects have been extended time and again without any fault on the part of sponsors.

“This situation does not augur well with the Federal Government’s vision for creating “ease of doing business” and encouragement of private investment,” he added.

Copyright Business Recorder, 2022