ISLAMABAD: The Private Power & Infrastructure Board (PPIB) has asked Saudi Arabia to expedite finalization of Government to Government (G2G) framework agreement, enabling both countries to proceed towards commercial agreements and tariffs on about a dozen projects, well-informed sources told Business Recorder.
A high-level Saudi delegation led by the Foreign Minister visited Pakistan during the third week of April and held meetings at the highest level including line ministries to finalize agenda for the forthcoming private sector delegation to be led by Investment Minister which is due on May 5, 2024.
In a letter to Dr Akram A Jadawi, General Manager, Ministry of Energy, KSA, Managing Director PPIB, Shah Jahan Mirza referred to the breakout session held during the visit of the Saudi delegation to Pakistan on 16 April 2024, in Islamabad.
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According to the Managing Director PPIB, as informed in the reference meeting, government of Pakistan is actively working towards implementing transformative measures in the power system to guarantee affordability, sustainability and energy security.
The development of indigenous power generation projects and removal of transmission constraints stand out as one of the government’s highest priorities. For the purpose, power generation projects, including solar PV, hydro and local coal-based power projects, and transmission/ancillary services projects have been worked out for development through Saudi investors under G2G mode, the details of which were shared with the Saudi side in the meeting on April 16, 2024.
He further informed the Saudi side that to facilitate the swift implementation of these projects under the G2G mode, the GoP has enacted the Inter-Governmental Commercial Transaction Act, 2022 (IGCTA 2022), which establishes a fast-track mechanism for project development.
Under the IGCTA, the negotiation and finalization of a Framework Agreement between the two governments are prerequisites, following which commercial agreements and tariffs will be negotiated and finalized between the nominated entities of both governments. In this context, a draft G2G Framework Agreement was shared with the Saudi side in February 2024 for their review and finalization.
Mirza said, as discussed during the meeting on April 16, 2024 in Islamabad, the PPIB has proposed that while finalizing the G2G agreement “the development of renewable energy and thermal power generation, transmission and related ancillary infrastructure and distribution improvement projects” may also be added.
Copyright Business Recorder, 2024