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News Headlines for the month of
MARCH 2015

Punjab government to set up LNG power plant near Sheikhupura

Punjab government has decided to set up LNG power plant near Sheikhupura and more than 1000MW electricity would be generated from this plant. This was stated by Punjab Chief Minister Shahbaz Sharif while addressing a meeting, held here on Saturday to review the progress on energy projects in the province. Federal Minister for Water and Power Khawaja Muhammad Asif and Federal Minister for Petroleum Shahid Khaqan Abbasi also participated in the meeting. The meeting agreed upon taking all necessary measures regarding speedy progress for early completion of energy projects. "The Federal Cabinet has given approval to setting up of LNG power plant projects at three different places in Punjab and a total of 3,600 megawatt electricity will be generated from these projects," he added. He thanked Prime Minister Nawaz Sharif and Federal Minister for Petroleum Shahid Khaqan Abbasi for granting approval to the provision of 200MMCFD LNG to Punjab. He expressed the hope that a number of energy projects would generate electricity during next three years and the people will be provided relief by reducing energy crisis. "Every moment of the nation is precious and the energy projects will be executed transparently and speedily," he added. The Chief Minister directed the departments concerned should immediately take necessary steps for LNG power plants and work should be started for laying pipelines and up-gradation of transmission lines at the earliest. He said energy projects of LNG will be completed on fast track. He also said 100MW solar project has been completed in a record period of six months at Quaid-i-Azam Solar Park, Bahawalpur. "It is the first and biggest solar project in the history of the country. The Prime Minister will soon inaugurate this project," he added. According to him, work is continuing on the project of generating energy through indigenous coal with the co-operation of China in Salt Range. All out resources will be provided for ensuring speedy completion of energy projects. Khawaja Muhammad Asif and Shahid Khaqan Abbasi assured all possible co-operation to the Punjab Chief Minister for early completion of energy projects. Attorney General of Pakistan, Provincial Minister for Minerals Chaudhary Sher Ali, MNA Hamza Shahbaz, Members Provincial Assembly Rana Sanaullah, Dr Ayesha Ghaus Pasha, Chief Secretary, Federal Secretary for Water and Power, Chairman NEPRA, Managing Directors NTDC, Sui Northern Gas Pipelines Ltd, NESPAK, PPIB besides officials of Federal and Provincial governments concerned attended the meeting. In a separate meeting, the Chief Minister expressed determination to eliminate energy crisis for rapid development of the country. He said completion of energy projects expeditiously is our mission and we are marching forward seriously for overcoming energy crisis. The meeting discussed various proposals for setting up of Punjab Energy Projects Development Fund. The meeting was attended by MPA Dr Ayesha Ghaus Pasha, Shaukat Tareen, Chairman Planning and Development, Additional Chief Secretary Energy, Secretary Finance, President Bank of Punjab and senior officials of various banks attended the meeting.

Copyright Business Recorder, 2015

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Setting up of 49.5MW wind power plant: DLL's TGL achieves financial close

Dawood Laurencepur Limited (DLL) on Monday said its wholly-owned subsidiary Tenaga Generasi Limited (TGL) has achieved a financial close. TGL is setting up a 49.5 megawatts wind power generation plant in Sindh province. The project is expected to be operational by 2016. "The Alternative Energy Development Board (AEDB) has issued guarantee for the project on behalf of Government of Pakistan," the company said in a notice sent to Karachi and Lahore stock exchanges.

Copyright Business Recorder, 2015

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Wind power project: Gul Ahmed, AEDB sign guarantee

Gul Ahmed Wind Power Ltd, a subsidiary of Gul Ahmed Energy Limited and Alternative Energy Development Board (AEDB) Friday signed government of Pakistan guarantee by achieving financial close of its 50MW wind power project. Gul Ahmed Wind Power Ltd Executive Director Danish Iqbal and AEDB Chief Executive Officer (CEO) Asjad Imtiaz Ali signed the guarantee. The company achieved financial close for its 50MW wind power project located at Jhimpir of Thatta district in Sindh by signing GoP guarantee at the AEDB office. The project has been co-developed by Infraco Asia Development, a multi-donor funded infrastructure development company from Singapore and the IFC (a part of the World Bank Group) is also taking a minority interest in the project. The cost of the project will be $131 million. Debt for the project has been financed by the IFC, Proparco, FMO, United Bank Limited, National Bank of Pakistan and Bank Alfalah. The project is expected to go into operation in late 2016 and will supply environment-friendly electricity to the national grid. "We are determined to making a positive contribution to developing the renewable energy sector in Pakistan," said Iqbal Alimohamed, CEO of the company in a statement. This is the group's second wind power project to achieve financial close this year. Addressing the signing ceremony, Executive Director Gul Ahmed Wind Power, Danish Iqbal lauded the efforts of the government to facilitate in achieving financial close of the project. He said that lots of wind power projects would follow and the country would get cheaper clean energy to overcome power crisis in Pakistan. He said the company had arranged all required funds to start work on this project. AEDB CEO Asad Imtiaz Ali said March 31, 2015 is the last date to achieve financial close. The ministers' absence was noted and when asked why the ministers were not present at the event the response was that they may have other more important engagements. He said AEDB has signed financial close documents with wind power projects of 300 MW within two days which will be completed in 18 months. Private sector will invest $800 million in these projects arranged from different banks. He said the estimated cost of Gul Ahmed's 50 MW wind power project is $130 million. Nepra has already determined 13.52 cents per kWh upfront tariff for wind power projects. Tariff of wind power projects is higher in the first 10 years because of payments to banks, after which it would come down to around 4-5 cents per kWh. He said the world is focusing on alternative generation sources because it will be clean energy and does not require foreign exchange for fuel.

Copyright Business Recorder, 2015

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German envoy, Shahbaz discuss co-operation in energy sector

Ambassador of Germany Dr Cyrill Nunn called on Punjab Chief Minister Shahbaz Sharif here on Friday and discussed matters of mutual interest, bilateral relations and promotion of co-operation in energy and other sectors. Talking to the German Ambassador, the CM said there were deep-rooted friendly relations between Pakistan and Germany and Germany was big trade partner of Pakistan. He said Muslim League-N government led by Prime Minister Nawaz Sharif was making sincere efforts for resolving energy crisis and it had been decided to set up three big projects for generation of 3,600 megawatt electricity in Punjab with gas. He said the federal government would set up two projects of 2,400 megawatt while Punjab government would establish a project of 1,200 megawatt. He said the work would be carried out speedily and transparently on those projects like other projects executed by the provincial government, adding those gas-based projects would start power generation by 2017. Shahbaz Sharif said sincere efforts for generation of electricity being made during the tenure of Prime Minister Nawaz Sharif were unprecedented in the history of Pakistan. The CM invited German companies to collaborate in gas-based power generation projects and said that co-operation of German companies would be welcomed. German Ambassador Dr Cyrill Nunn while speaking on the occasion said Germany wanted to further promote its relations with Pakistan and a large business delegation of Germany would visit Pakistan next month.

Copyright Business Recorder, 2015

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Power sector projects: Xi likely to arrive on April 10

Chinese President Xi Jinping is expected to visit Pakistan on April 10, 2015 to witness the signing ceremonies of different projects, including power sector projects. Well-informed sources told Business Recorder that the major issues with regard to different projects were sorted out during the recent visit to China of a delegation led by Chief Minister Punjab Shahbaz Sharif. In February 2015, a delegation visited China. The delegation met China's National Energy Management and apprised them that Pakistan has reached an advanced stage in projects preparation. The sources said Additional Secretary Incharge Ministry of Water and Power, Younus Dagha informed the Chinese side that power sector projects including three coal projects (Port Qasim, Engro and Sahiwal Wind), two hydropower (840 MW Suki Kinari and 720 MW Karot), three wind (Dawood Hydro China 50 MW), UET (100 MW), Sachal (50 MW) and one solar (Bahawalpur) are at an advanced stage of preparation. Engro's block I project has not reached an advanced stage. Sukki Kinari has reached near financing agreement, ie, at implementation stage. Its Commercial Operation Date (CoD) is 2020. The coal projects have already crossed the stage of security documents. They will be provided letter of support which implies they will sign Implementation Agreement (IA) and Power Purchase Agreement (PPA) with the Government of Pakistan (GoP). M/s Engro is expected to sign a term sheet in the presence of the Chinese President. According to sources, three wind projects can achieve financial close before the Chinese President's visit. Chinese side had sought a list of projects that could be formalised during the visit of the Chinese President to Pakistan. According to sources, a delegation of NEA and Sinosure is also expected to visit Pakistan to finalise arrangements prior to the visit of the Chinese President. The major issue of Solar Park (Bahawalpur) was tariff determination, security documents and configuration of the project for generation licences. "I guess that Solar Park project will also sign Implementation Agreement," the sources continued. The sources said all the power sector projects which are at advanced stage are moving towards due diligence with banks to generate funding. Some projects such as the three wind projects have crossed due diligence stage and now the banks will scrutinize their documentation. The sources said, Chinese banks have agreed to offer green channel for power sector projects which are at an advanced stage. "We are expecting that funding process which takes three to four months will be reduced to one month by using the clout of the Chinese President," the sources continued. M/s Hub Power Company (Hubco) has expressed its intention to sign Joint Venture Agreement during the visit of Chinese President. Engro wants a joint venture with Shanghai Electric. Commenting on power transmission line project, the sources said, as wind projects and coal projects will be completed, a separate transmission line would be required. The Government has started negotiations with China for financing of transmission line project from Mitiari (Sindh) to Lahore and Faisalabad. The project's feasibility has already been completed. According to the policy, a transmission line company will be established in the private sector which will get tariff from National Electric Power Regulatory Authority (Nepra).

Copyright Business Recorder, 2015

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Pakistan, Qatar to enhance co-operation in energy, other fields

Pakistan and Qatar have agreed to further promote ties in the fields of energy, trade, economic, investment, manpower and defence considering them as priority areas for further enhancing bilateral relations and strengthening their existing mutually beneficial co-operation. It was agreed during the recent visit of Emir of Qatar his Highness Sheikh Tamim Bin Hamad Al-Thani who was on official visit to Pakistan on March 23 to 24 on the invitation of Prime Minister Muhammad Nawaz Sharif. Formal delegation-level talks were held at the Prime Minister's House in which Prime Minister Nawaz Sharif and Emir of Qatar Sheikh Tamim Bin Hamad Al-Thani led their respective sides. The talks were preceded by a one-on-one meeting between the Prime Minister and the Emir of Qatar. According to a statement issued by Foreign Office Spokesperson regarding the details of the visit of Emir of Qatar and his meetings the Prime Minister expressed deep appreciation for the progress made by the State of Qatar under the sagacious leadership of the Emir. On behalf of the people and the Government of Pakistan, the Prime Minister also extended heartiest felicitations to the people and the leadership of the State of Qatar for hosting FIFA 2022 World Cup, one of the most prestigious sports events in the World. The Emir of the State of Qatar appreciated the measures taken by the Government of Pakistan over the last two years to achieve economic stability, provide conducive environment for investment, improve infrastructure and address energy situation. He also expressed profound appreciation for the contribution made by Pakistani expatriate community to the socio-economic development of Qatar.

Copyright Associated Press of Pakistan, 2015

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CASA-1000: MA and PPAs to be inked next month

Master Agreement (MA) and Power Purchase Agreements (PPAs) of multi-nation Central Asia -South Asia Electricity Transmission and Trade Project (CASA-1000) are expected to be inked by the end of next month, well-informed sources told Business Recorder. The wording of agreements'' drafts was finalized at a two-day meeting held on March 16-17, 2015 between the stakeholders in Istanbul. The World Bank and USAID are the two key agencies which are pushing the stakeholders to finalize the project as early as possible. The World Bank had approved the project on March 27, 2014. The closing date of the project is June 30, 2020. According to the World Bank, the project’s cost will be $997 million; of which the commitment amount of the Bank is $526.5 million. Pakistani officials, however, say that the cost of the project is $1.17 billion, of which Pakistan’s share is around $300 million, including the construction of transmission line and converter stations. The sources said, NTDC has already floated a tender of the three converter stations whose bid submission is next month. Converters will be installed at Sangtuda (Tajikistan), Kabul (Afghanistan) and Peshawar. CASA-1000 is now completing its initial financial and multi-national power transaction and transmission agreements, and will soon enter the construction phase. ECODIT LLC, prime contractor for the USAID energy links project, is providing technical and financial support to the CASA-1000 Secretariat. The World Bank further said that the implementation of the project is progressing well on the three key areas: (i) commercial - prices and all commercial issues related to the (PPAs) and Master Agreement were finalized in the recently-held meetings in Istanbul; (ii) procurement - is progressing with the receipt of proposals for the owner’s engineers; the launch of bidding for two major packages (a) Afghanistan Transmission line - the longest section of DC line - and (b) the HVDC converter stations and O&M package. In parallel, preparations of the community support program for Afghanistan and Pakistan are progressing; (iii) Financing - discussions are ongoing with EBRD, IsDB and DFID to seek financing to close the remaining gap. In December 2014, Kyrgyz Republic, Tajikistan, Afghanistan and Pakistan had signed an agreement on CASA-1000 in Istanbul, according to which the price of electricity to be imported from Tajikistan will be 9.35 cents per unit. Pakistan believes that CASA-1000 project will be completed by 2018 under the umbrella of the World Bank. Tajikistan''s share in the energy export will be 70% while Kyrgyzstan exports will account for 30%. Afghanistan will consume 300 MW of the exported energy while Pakistan will receive 1000 MW of electricity. The project is forecast to boost energy trade in the region that will lead to sustainable development.

Copyright Business Recorder, 2015

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NTDCL signs energy purchase agreement with 3 wind power producers

National Transmission and Despatch Company Limited (NTDCL) has signed Direct Agreement to the Energy Purchase Agreements with three wind power producers and their lenders having total capacity of 129.5 MW power, during a ceremony held at WAPDA house on Thursday. Managing Director NTDCL, who is also holding the portfolio of General Manager CPPA, signed agreements with 30 MW Tapal Wind Energy Private Limited, 49.5 MW Master Wind Energy Limited and 50 MW Gul Ahmed Wind Power Limited with the approval of the Board of Directors (BoD) NTDCL.-PR

Copyright Business Recorder, 2015

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Tajikistan to export 1000 megawatts of hydro power to Pakistan by 2018

Tajikistan's Ambassador to Pakistan, Sher Ali S Jononov on Tuesday has said that his country would be able to export 1000 megawatts of clean and cheep hydro-energy to Pakistan by 2018. While addressing a press conference here at a local hotel he said that the work on the project- Central Asia South Asia Electricity Transmission and Trade Project (CASA-1000) is underway and Pakistan would receive 1000 mw hydro power within the next three years. He hoped that the project will help boosting energy trade between the two countries. "The project is financed by the World Bank," he said. He said that Tajkistan and Pakistan have been closely working in various fields including trade and investment. The both brotherly countries have got huge trade potential in various sectors including textile, agriculture, food industry, and surgical equipments etc. He said that Tajikistan's total export volume to Pakistan stood at around $100 million last year. Ambassador termed this trade figure as meagre amount. "The existing bilateral trade volume did not commensurate with the real potential of the two brother countries," he said. He urged the Pakistani business community to work aggressively to enhance the trade activities with the counterpart organisations of his country. He said Tajikistan was also keen to further strengthen the existing relationship with Pakistan especially in expanding trade and investments ties, through mutual co-operation in power sector. He said that availability of cheep and adequate energy is required by Pakistan- a country that has been facing energy crisis since long. The import of CASA1000 mw electricity will attract foreign investment as well as to boost its local industry, he hopped.

Copyright Business Recorder, 2015

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Dasu hydropower project: Wapda signs two contracts

In what can be termed a significant development towards the implementation of the first stage of Dasu Hydropower Project with a generation capacity of 2160MW, the Pakistan Water and Power Development Authority (Wapda) yesterday signed two agreements for relocation of Karakuram Highway (KKH) and construction of Right Bank Access Road in the project area. The construction work on the project would start as soon as possible. The contracts were signed between Wapda and China Civil Engineering Construction Company (CCECC) here at a ceremony held at the Wapda House yesterday. Wapda Chairman Zafar Mahmood, Members of the Authority, CCECC Acting President Hao Xizhong, CCECC Assistant President Wang Xiangdong and Dasu Project authorities were present on the occasion. Dasu General Manager and Project Director Haji Muhammad Farooq and CCECC Director General Asia Oceanica Li Shiquan signed the contracts on behalf of their respective organisations. The contract namely Dasu-KKH-01 worth Rs 14.538 billion relates to relocation of 25-kilometre-long stretch of the KKH. The contract is scheduled to be implemented in 546 days. The two-lane relocated stretch will be constructed at a higher attitude with the design standard prescribed for KKH. With construction of this strip, the passage to the mechanical area and access to the dam site will be bypassed so as not to hinder the construction activities on the project. Most importantly, the people will also get a hassle-free quality road service. The second contract namely Dasu-RAR-01, amounting to Rs 2.713 billion, is scheduled to be implemented in one year. This 12-kilometer long road will be constructed on the right bank of the River Indus from Komila to Seo Dam site. At the moment, there is no proper road access except a jeepable track. The construction of the two-lane access road will not only enable the project authorities to initiate work on camps and proposed vocational training institutes but also provide thousands of people of adjoining areas with an all-weather quality road facility. The district administration is currently busy in land acquisition for Stage-1 of Dasu Hydropower Project. The project authorities have, however, said that the process of acquiring land is slow, and expressed the apprehension that implementation on two contracts as well as very completion of the Stage-I of Dasu project will suffer a delay if the pace of land acquisition is not accelerated. The project authorities said that taking notice of slow pace of land acquisition, Khawja Muhammad Asif, Federal Minister for Water and Power, in a letter, requested the Khyber Pakhtunkhwa (KPK) Chief Minister to speed up the land acquisition process. They said that the KPK Governor has also directed the district administration to accelerate the pace of acquiring land for Dasu project. It is important to mention here that the federal government is implementing the 4320-MW Dasu Hydropower Project in two stages. The World Bank is financing Stage-I of the Project with an IDA Credit of US $588.4 million and an IDA PCG of US $460 million. Upon completion, the first stage will contribute a huge quantity of electricity of cheap, affordable and environment-friendly electricity to the national grid. The project will not only add a sizeable quantum of low-cost electricity to the national grid but also provide relief to the consumers by reducing power tariff. To cap it all, the project will usher in a new era of socio-economic development in the far-flung areas of KPK.

Copyright Associated Press of Pakistan, 2015

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President seeks economic ties with Azerbaijan to new heights

President Mamnoon Hussain on Thursday stressed collective efforts for taking economic relations between Pakistan and Azerbaijan to new heights. Addressing the Pakistan-Azerbaijan Business Forum here in Baku, the President said energy sector of Pakistan offered vast opportunities for investment and called upon Azeri investors to take advantage of it, a press release said. The President noted that over a period of time, Pakistan and Azerbaijan had developed expertise in different fields which can be shared for mutual benefits. He said the pharmaceutical products, surgical instruments, sports goods, defence equipment, ready-made garments, rice, fruits and sea food were some of the high quality products of Pakistan awaiting effective introduction in Azeri market. He said likewise, Azerbaijan's expertise in the field of oil and gas exploration, extraction and refining could potentially bring great benefits to Pakistan. President Mamnoon Hussain said there was a tremendous potential to significantly increase and diversify the two-way trade for which there was a need to devise joint strategies. The President stated that Pakistan's geography, 180 million people, burgeoning middle class and existence of large coal deposits offer enormous opportunities for foreign investment. Calling upon Azeri businessmen to take advantage of investor friendly policies of Pakistan, the President elaborated that Pakistan offers a liberal investment policy, which includes, 100 percent equity ownership, full repatriation of capital, tax breaks and customs duty concessions on import of plant, machinery and raw materials. The President said Pakistan was also working to expand co-operation with regional economic organisations. The traders, industrialists and investors of two countries held very useful and productive discussions on different sectors of mutual interest. They affirmed commitment to expand co-operation between the private sectors of two countries expressing hope that today's fruitful discussions would result into signing various business agreements in near future. Speaking on the occasion, President of Azerbaijan President Ilham Heydar Aliyev said productive bilateral interaction was held in Pakistan-Azerbaijan Business Forum. He said Azerbaijan would assist Pakistan in its energy sector, stating that Azerbaijan was looking into the possibility of diversifying its economy and in this regard co-operation with Pakistan would be further cemented. He said both countries should also collectively work on legal tax regime in order to avoid double taxation. A large number of traders and industrialists of two countries attended the forum.

Copyright Associated Press of Pakistan, 2015

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Prime Minister seeks foreign investment in power sector

Prime Minister Muhammad Nawaz Sharif on Wednesday said his government was working on several short and long term projects for power generation and welcomed the keen interest of foreign investors in the key sector. He was talking to a delegation of China Three Gorges Corporation who called on the Prime Minister prior to inking of two Memorandums of Understanding here at the PM House. China Three Gorges Corporation (CTG) - a state-owned enterprise of Government of China was owner operator of the world''s largest hydropower project - Three Gorges Project with a total installed capacity of 22,500 MW. CTG was investing in Pakistan and has created an investment arm called CWE Investment Corp (CWEI), CWEI Hong Kong Investment Company (CWEI HK) and China Three Gorges South Asia Investment Limited (CTGSAIL). The Prime Minister was informed that the CTG through its subsidiaries CWEI, CWEI HK and CTGSAIL were developing three hydropower projects in private sector through private power and infrastructure Board. These include 1100 MW Kohala Hydropower Project, 720 MW Karot Hydropower Project and 590 MW Mahl Hydropower Project. Two of these projects - Karot and Kohala are included in China Pakistan Economic Corridor (CPEC).

Copyright Associated Press of Pakistan, 2015

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49.5 megawatts wind power project inaugurated

Federal Minister for Water and Power, Khwaja Muhammad Asif here on Wednesday said that only those areas of the country experience more power loadshedding than the hours announced by the government where recovery to the discos is very low mainly because of theft of electricity. The minister was speaking at the inaugural ceremony of Chinese Company Three Gorges First Wind Farm Pakistan (Pvt) Limited's 49.5 MW Wind Power Project and CSCEC Wind Power Equipment Pakistan (Pvt) Limited's Wind Power Manufacturing Facility at Jhimpir, in district Thatta. Sindh Government's Energy Development Department, National Electric Power Regulatory Authority (NEPRA) and National Transmission and Distribution Company (NTDC) are also partners in this project. Minister of State for Water and Power, Chaudhry Abid Sher Ali, Sindh Minister for Finance Syed Murad Ali Shah and Chairman, Chinese Company CSCEC, Lu Chun and the Consul General of China in Karachi were also present.

Copyright Associated Press of Pakistan, 2015

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Japan-Saarc Energy symposium: enhanced cooperation to address problems urged

Japanese Parliamentary Vice-Minister for Foreign Affairs Kazuyuki Nakane wants enhanced co-operation among the South Asian Association of Regional Co-operation (Saarc) countries to address their energy problems. Speaking at the inaugural session of eighth Japan-Saarc Energy symposium, he stated that since its inauguration in 2006, the Japan-Saarc energy symposium had played a meaningful role in setting the direction for co-operation among the regional countries in energy sector. The event was organised by Japan Embassy in collaboration with the Saarc Energy Centre (SEC) and the National University of Sciences and Technology (Nust), here on Tuesday. The Minister added that the symposium had been tasked with the important role of producing an outcome document having medium-term vision for energy connectivity in the Saarc region. The document would be distributed among high-level members of each Saarc member state through respective Japanese embassies, he added. Kazuyuki Nakane added that his country had been playing very proactively for many years in advancing co-operation with the Saarc member states in the power sector to minimise their challenges. Some countries, he added, had surplus power generation capacity, while others suffered shortage. "Similarly, some countries face severe power transmission and distribution losses, while others need environment-friendly energy sources and some nations need to implement institutional reforms in power sector," added the minister. He further stated that Japan was committed to offer tailor-made assistance to appropriately respond to the needs of each member state. On the institutional side, Japan supported Pakistan's efforts to reform its power sector. Japan was promoting co-operation with India and Bangladesh for the construction of high efficiency coal-fired power plants using Japanese technology, he said, adding his country was providing assistance to Nepal for the construction of a hydro-power plant. "Sri Lanka and Bhutan are being provided assistance for development of transmission and distribution grid whereas Japan is also extending co-operation to Afghanistan for solar power generation." He further stated Jica and other Japanese implementing agencies would continue to engage with individual projects to strengthen energy connectivity within Saarc, referring to the "Medium-term Vision" to be completed at this symposium. "In future, we hope that region-wide mechanisms for solving common challenges will be put into place including a scheme to transmit power from an energy-surplus country to an energy-deficient country. We will extend co-operation from a new point of view that we connect 'dots' of assistance that has been extended in the bilateral context to draw 'lines' which can eventually be linked to create a 'face' of region-wide co-operation. "There has never been a more right time than today to strengthen regional co-operation among the Saarc member states. Last November, the 18th Saarc Summit was convened for the first time in three years, on the occasion the Kathmandu Declaration was adopted. Also signed at this summit meeting was the Saarc Framework Agreement for Energy Co-operation, which was proposed at the second and third Saarc Energy Symposia. This is a major step forward as it laid the foundation to advance energy co-operation in the Saarc region. I believe that each Saarc state now needs to accelerate the development of respective supporting mechanism." The symposium was attended by energy policy experts, professionals and academia from Japan and all Saarc member states. The symposium aims at complementing the efforts of individual Saarc member states in terms of energy self-sufficiency by wrapping up the seven Japan-Saarc Energy Symposiums in the past and making consensus on recommendations for Medium-term Vision for Energy Connectivity in the Saarc region. Recommendations to be finalised will be shared with all the Saarc member states for their consideration.

Copyright Business Recorder, 2015

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Nepra approves purchase of 1,000 megawatts power from Iran

National Electric Power Regulatory Authority (Nepra) has, in principle, approved the purchase of 1,000 MW electricity from Iran at the rate of Rs 8-10 per unit. Iran has also expressed willingness to extend 70 percent financing for Iran-Balochistan transmission line. The decision was taken by the authority in a public hearing presided over by Chairman Nepra, Brigadier Tariq Sadozai (Retired). Member Nepra, Khawaja Naeem praised the National Transmission and Dispatch Company (NTDC) for putting in place good conditions in the agreement with Iran. The authority did not raise objection on electricity import plan or the tariff negotiated by the NTDC. Deputy General Manager NTDC informed the authority that Iranian company M/s Tavanir will set up a plant of 1,300 MW in Zahidan to provide electricity to Pakistan. Iranian company Tavanir and NTDC had approved the feasibility study report prepared jointly by Nespak and Moshanir (Iran) consultants on 1,000 MW electricity supply from Iran to Pakistan. A DVDC transmission system has been proposed to be set up along with converter station at either end to transmit power to the national grid at Quetta. The cost of HVDC transmission interconnection project including two HVDC converter/inverter sub stations, one for each side as well as HVDC+_ 500 kV line is estimated to cost around $700 million excluding the cost of 1,300 MW power plant needed to be constructed on the Iranian side. Iran will construct power plant from its own resources. With this system, transmission losses will not be more than 2 percent. Tavanir has consented to finance HVDC interconnection project cost in its own territory (approx. $265 million). Both sides have agreed that the power purchase contract of February 7, 2007 for supply of 100 MW to Gwadar will be used as a base document in preparation of contract for supply of 1,000 MW electricity. In case one transmission line is working properly, electricity supply will continue uninterruptedly. The cost of the transmission line from border to Quetta will be Rs 580 million. In 2012, former Minister for Water and Power, Ahmad Mukhtar had fired the then Managing Director NTDC Rasul Khan Mehsud who inked the MoU with Iran for import of 1,000 MW soon after he returned from Iran.

Copyright Business Recorder, 2015

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NTDCL completes rehab work of 220KV Kapco-Multan transmission line

NTDCL engineers and staff have completed the rehabilitation work of 220Kv Kapco-Multan transmission line and started 820MW power dispersal from Kot Addu Power Company (Kapco) to 500Kv grid station Multan. The said transmission line will reduce forced loadshedding and improve voltage profile in the areas of Multan and Faisalabad, NTDCL spokesman said. Due to abnormal flood diversion in river course of Chenab in September 2014, the tower no 130 of 220Kv transmission line KAPCO-Multan CCT-5&6 was totally destroyed whereas six x-arms of tower no 126, 127 and 128 were damaged and tower no 131 was completely destroyed. Resultantly, dispersal of power supply from Kapco to 500KV grid station Multan was discontinued which caused national transmission grid system constraint for evacuation of 820MW electricity generated by Kot Addu power station, which was met through remaining four circuits. Hence, the restoration of power dispersal through 220KV transmission line KAPCO-Multan CCT No 5&6 was urgently required to ensure both the evacuation of power as well as provision of reliable contingency to the system. On the direction of MD NTDCL, Chief Engineer GSO Multan took effective measures to complete rehabilitation work on war footing. About 40-meter deep foundation was constructed and tower no 130 was re-erected. Whereas other damaged towers were also repaired. During the rehabilitation work, NTDCL engineers faced lot of difficulties to shift material and heavy machinery to the site along with critical working conditions. The spokesman said that due to timely completion of the said transmission line, dispersal of electrical power of 820MW from Kapco power house to 500KV grid station Multan will help in reduction of forced load shedding and improve voltage profile being faced by the Fesco consumers in the area of Narrwala, Gojra, Summandri, Thekriwala, and Mepco consumers of Jahanian, Garrah Morr, Vehari, Burewala, Luddan, Kabirwala, Khanewal, Lodhraan, Dera Ghazi Khan and Muzzafargarh.

Copyright Business Recorder, 2015

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49.5 megawatts wind power plant: DLL to invest $30 million in TGL's equity

Dawood Lawrencepur Limited (DLL) is going to invest $30 million in the equity of Tenaga Generasi Limited (TGL) through the issue of right shares. This was disclosed by the company through a notice to the stock exchanges in Karachi and Lahore to share with its stakeholders the material information under the regulatory laws. TGL, the wholly-owned subsidiary of DLL, is developing a 49.5 megawatts wind power plant at Kuttikun, Mirpur Sakro Taluka of District Thatta in Sindh. The power generation facility is being constructed at a cost of $89m. The project is envisaged to be financed through a mix of 25 per cent equity and 75pc debt. While the $30m equity would be provided by the DLL and International Finance Corporation (IFC), $59m debt would be made available by the Overseas Private Investment Corporation (OPIC), IFC and a local lender consortium. To this effect, the Board of Directors of DLL, in its Thursday's meeting, gave a nod to the signing of equity documents by the company. Also, the Board allowed the company to proceed with the sponsor support agreement that would lead to $30m or 25pc equity investment in the TGL by the DLL. The Board also authorised the company to take all necessary steps to facilitate the TGL achieving financial close by the 31st of this month. The listed companies are bound to share any price-sensitive material information with their shareholders at the country's stock exchanges under Section 15D (1) of the Securities and Exchange Commission of Pakistan Ordinance 1969.

Copyright Business Recorder, 2015

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Border areas of Balochistan: Iran agrees to raise power supply

Iran has agreed to increase electricity supply from 74MW to 100MW for border areas of Balochistan by 2016. The tariff of the electricity varies from Rs 7-10 cents, depending on international fuel prices. Well-informed sources told Business Recorder that tariff deadline of 74MW of electricity being imported from Iran had expired. However, after threadbare negotiations Iran has extended the prevalent applicable tariff for 2015. Pakistan requested for extension of two years in current applicable tariff, but Iran has refused to honour the request, saying that they have one-year agreements with all electricity importing countries. The sources said that Pakistan in order to get electricity supply enhanced from Iran will have to improve its transmission system, including replacement of current transformers with more capacity transformers. According to sources, supply of 100MW from Iran to Gwadar also came under discussion and payment of $100 million against electricity imported in recent years. Pakistan is unable to pay the due amount owing to non-availability of banking facility. Pakistan has proposed that whatever outstanding payments are due from Pakistan should be converted into loan. Iranian side assured that they will take up the matter with the Central Bank of Iran and, as such, Pakistan was hopeful of getting the issue resolved. And if the amount was converted into loan, payment issue will be settled, the sources added. Pakistan has also expressed willingness to export rice to Iran against $100m outstanding electricity charges. Pakistan''s ambassador to Iran has been actively pursuing Iranian authorities for a deal on 30,000 tons of rice in lieu of outstanding electricity payment. "If a deal is struck on supply of 30,000 tons rice to Iran, Pakistan will certainly get a relief on payment issue," the sources added. Iran and Pakistan have also shown keen interest in finalising Power Purchase Agreement (PPA) for buying 1000MW electricity from Iran. Pakistan and Iran will discuss the PPA next month, the sources said, adding that as per memorandum of understanding (MoU) tariff would be 8 to 11 cent KwH which could be revised minus/plus at the time of finalisation of the agreement. The sources said Pakistan expressed its intention to increase electricity import from proposed 1000MW to 3000MW. Pakistan will import 1000MW electricity from Iran in the first phase. Import of remaining 2000MW electricity will be considered in the second phase for which feasibility study will be carried out in the next four to five months. Iranian company Tavnir and NTDC had approved the feasibility study report prepared jointly by Nespak and Moshanir (Iran) consultants on 1000MW electricity supply from Iran to Pakistan. A DVDC transmission system will be set up along with converter station at either end for transmitting power to the national grid at Quetta. The cost of HVDC transmission inter-connection project, including two HVDC converter/inverter sub-stations, one for each side as well as HVDC(+)(-) 500 KV line is estimated to be around $700m, excluding the cost of 1300MW power plant, required to be constructed on Iranian side. Iran will construct power plant through its own resources. Tavanir has consented to finance HVDC inter-connection project cost in its own territory (approximately $265m). Both sides have agreed that the power purchase contract of February 7, 2007 for supply of 100MW to Gwadar will be used as a base document in preparation for the contract for supply of 1000MW electricity. In 2012, former minister for water and power, Ahmad Mukhtar, had fired the then managing director of NTDC, Rasul Khan Mehsud, who inked MoU with Iran for import of 1000MW, soon after he returned from Iran.

Copyright Business Recorder, 2015

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'Government setting up fresh power projects to produce more 14,000 megawatts'

The federal government is setting up fresh power projects to produce 14,000 megawatts of additional power to lessen a shortage of 9,000 megawatts that had caused problems for the public and the industry, Provincial Minister for Education and Tourism Rana Mashhood Ahmad Khan revealed this during opening session of a three-day Annual Architects Convention here on Wednesday. The minister said, "In 1999 Pakistan had surplus electricity and India was intent to buy this surplus production from us, but today Pakistan is facing a 9,000MW shortage because of the absence of new plants. However, 17 countries in the world are investing in this sector in Pakistan due to efforts of PML-N government." He claimed that power loadshedding would be reduced to half in 2015 for urban and rural areas as compared to last year He further said that the Punjab government has adopted an active strategy to address these issues through urban policy and planning, urban design, urban economics and urban sociology. He also stressed upon ensuring political continuity to ensure continual infrastructure development. The Institute of Architects Pakistan, Lahore Chapter, has organised the convention which will be concluded on March 6.

Copyright Business Recorder, 2015

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South Korean business team visits PBIT

A South Korean business delegation on Wednesday visited Punjab Board of Investment and Trade (PBIT), here on Wednesday. The delegation of Bew Power Asia was briefed about investment climate in Punjab. The purpose of this visit was to know about the investment climate in Punjab and the incentives offered to the investors in the energy sector. Bew Asia Power's team showed keen interest in investing in the small hydro power plants and explained the complete process of installing a hydro power plant, from identifying site to the running of the turbine to produce electricity. The spokesperson for PBIT said that chairman BEW Asia Power Reinhard Bohem had explained that these environmental friendly micro-power plants could be used for irrigation. These plants are cheaper, faster and easy to maintain. He informed that hydro plants have marginal ecological impact, are safe against flood water due to its lifting mechanism. In addition to the presentation about PBIT's goals and functions, Director General PBIT Lubna Pathan, briefed the delegation about the Punjab Power Policy and investment opportunities in the power sector. The meeting was attended by Shaukat Ali Makadum, ex-Ambassador of Pakistan to South Korea and Kazakhstan, Sooba Khan, Honorary Investment Counsellor, BOI, Kwangmo Han, President, Bew Asia Power and Professor Walter Kalteis, President, Bew Asia Power.

Copyright Business Recorder, 2015

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Two nuclear power plants: Exim Bank agrees to extend $6.5 billion credit

Exim Bank of China has reportedly agreed to extend mixed credit of $6.5 billion for two 1100MW each nuclear power plants to be set up at Karachi coast, sources told Business Recorder. ECNEC had approved the project at a cost of Rs 958.8 billion with FEC of Rs 727.8bn on February 21, 2013. Pakistan Atomic Energy Commission (PAEC) entered into contract agreement with M/s CNNC China for construction of the project at a cost of RMB 49bn ($7.903 billion). The ground breaking ceremony of the project was held on November 26, 2013. According to sources, Exim Bank of China has agreed to provide mixed credit equivalent to 81.97 per cent ($6.5bn) of the contract price at a composite rate of 3.20pc per annum. The financial package comprises of the following: (i) Government concessional loan of RMB 2.647bn (with interest @ 1pc per annum); (ii) preferential buyer credit of $4.001bn (with interest @ 2pc per annum); and (iii) buyer credit of $2.250bn (with interest @ 6pc per annum). The sources further stated that agreements for preferential buyers'' credit were signed with the Exim Bank of China on January 14, 2014 after completing necessary formalities, including clearance from Finance Division and legal vetting by the Law Ministry. However, signing of the government''s concessional loan was subject to prior signing of the inter-government framework agreement between the governments of China and Pakistan. However, Chinese government indicated that the framework agreement could be signed during the visit of President of Pakistan to China in mid-February 2014. EAD completed all necessary formalities, including concurrence from Finance Division and legal vetting from the Law Ministry, for the draft framework agreement. Due to paucity of time, prime minister''s approval was solicited under rule 16(2) of the Rules of Business, 1973. The Prime Minister’s Office intimated on February 18, 2014 that the PM had approved the proposal with the direction that the agreement should subsequently be placed before the cabinet for its formal approval. The inter-government framework agreement for government concessional loan of RMB 2.647bn was signed between the governments of China and Pakistan in Beijing during the visit of Pakistan’s president to China. After brief discussion, the cabinet considered the summary of January 9, 2015, submitted by the Economic Affairs Division (EAD) for formal approval of the inter-government framework agreement signed between governments of China and Pakistan for a concessional loan to finance the Karachi Nuclear Power Plant’s K-2/K-3 projects and accorded approval.

Copyright Business Recorder, 2015

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EETPL''s terminal: ADB approves $30 million loan

The Asian Development Bank (ADB) has approved a $30 million project loan to Engro Elengy Terminal Private Limited, a special purpose company which will build Pakistan’s first liquefied natural gas (LNG) re-gasification terminal. "Pakistan urgently needs to utilize its existing power generation capacity fully, while reducing its reliance on costly imported diesel fuel for electricity generation," said Mohammed Azim Hashimi, an investment specialist in ADB''s Private Sector Operations Department in a statement here on Friday. "Re-gasification of LNG will allow generation facilities to reach their maximum potential, using a cleaner and more efficient fuel, and will support the country’s push for greater energy security and diversification." The loan, to the special purpose unit of listed Pakistani company, Engro Corporation Limited, will be used to build and operate the re-gasification facility at Port Qasim, Karachi. The plant will have the capacity for re-gasification of up to three million tons of LNG per annum from March 2015 onwards. The fuel, suitable for use at most of the country’s combined cycle power plants, will be supplied to the state-owned Sui Southern Gas Company’s gas distribution network via a new high pressure pipeline. The converted fuel will help the government make an estimated savings of about $1 billion per annum on its current fuel import bill of nearly $15 billion. Since 2008, Pakistan has been suffering from crippling power shortages, caused by a lack of fuel, which has resulted in unscheduled industry shutdowns, power interruptions in cities, and public unrest. The country’s natural gas resources are also under severe strain with a recent survey showing that the rate of gas extraction is declining by over two percent a year, even as demand accelerates. Re-gasification converts LNG into natural gas, making it easier to store and distribute through pipelines to end users including power generators. The project will help avoid up to two million tons of greenhouse gas emissions a year. ADB works closely with the government to attract private sector capital into Pakistan’s energy sector, and has helped finance the country’s first two private hydropower projects and first three private wind power projects. ADB also offers long term commercial financing which is not readily available in Pakistan. The re-gasification project is expected to set legal and financial benchmarks for similar projects in future. Along with ADB''s loan, International Finance Corporation is expected to provide $20 million and local banks another $50 million. The rest of the project financing will come from equity proceeds of $33.3 million, for a total cost of $133.3 million, including contingencies. ADB, based in Manila, is dedicated to reducing poverty in Asia and the Pacific through inclusive economic growth, environmentally sustainable growth, and regional integration. Established in 1966, it is owned by 67 members - 48 from the region.

Copyright Associated Press of Pakistan, 2015

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