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News Headlines for the month of
APRIL 2015

Punjab solar energy projects reviewed

Punjab Chief Minister Shahbaz Sharif presided over a high-level meeting here on Wednesday which reviewed solar energy projects being set up in the province. Addressing the meeting, the chief minister said that Punjab government has set up Quaid-e-Azam Solar Park Bahawalpur which is the first and the biggest solar power station of the country. He said that this 100MW project has been completed by the Punjab government with its own resources within a record period and will soon be inaugurated. He said the Punjab government is taking speedy measures for resolving the energy crisis being faced by the country and special incentives are being offered to foreign investors for increasing investment in energy sector in the province. He said that through planning of solar power station, important steps have been taken for eliminating loadshedding. He said that the solar power station set up in the desert of Cholistan is a big hope for a brighter future of the country. He said that a solar power project of 900MW is being set up with the co-operation of China and every effort is being made for its completion by the beginning of 2016. He said that besides traditional methods, government is also striving for generation of electricity from alternative sources and energy projects are being executed without wasting any time. He said that power projects of 10400MW are being set up in the whole country under Pak-China Economic Corridor and Investment agreements of 20 billion dollars have been signed only in energy sector during the recent historic visit of the Chinese President to Pakistan. He said that work will be carried out round-the-clock for the completion of power projects with the co-operation of China as electricity is of vital importance to industrial and agriculture sector as well as strengthening of economy, creating job opportunities, increasing export and poverty alleviation. The chief minister further said that China has not announced such a big investment in any country so far and credit goes to the whole nation led by Prime Minister Muhammad Nawaz Sharif that China has offered support to Pakistan at difficult time. The chief minister further said the agreements with China would be implemented speedily and transparently as such historic opportunities were rare and the whole government machinery would work with honesty, commitment and hard work for giving a practical shape to these agreements. Provincial Home Minister Colonel Shuja Khanzada(Retd), Chief Secretary, Inspector General Police, Additional Chief Secretary Energy, Secretaries of Home, Energy and Information Departments, Chairman Punjab Power Development Company, Chief Executive Quaid-i-Azam Solar Park Bahawalpur and the authorities concerned attended the meeting.

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Energy sector: US, Pakistan to negotiate new framework

Pakistan and United States are to negotiate a new framework in energy sector on Wednesday (today) with main focus on implementation of market-based reforms to facilitate and accelerate private investment in financially sound clean energy projects, well-informed sources in USAID told Business Recorder. To improve the policy environment and promote private investment, US technical assistance will initially focus on the five Pakistani institutions whose decisions have a great influence on private investments in the power sector: PPIB, AEDB, Nepra, NTDC and Privatization Commission. The PPIB and AEDB ostensibly serve as "one window" for private power developers seeking to obtain project approvals. According to sources, USAID will work with these institutions to improve their capacity to accelerate project approvals, generation licences and pricing guidelines, transmission network development plans and develop other steps to simplify the procedural barriers faced by power project developers. Since 2010, the United States assistance has contributed over 1.5 gigawatts of electricity to Pakistan’s national grid station. Through this phase of US energy sector assistance, the US has focused on refurbishing existing hydropower and thermal generation facilities, completing hydropower projects and improving the operation and efficiency of Pakistan''s national grid. "Energy challenges constitute a key structural obstacle to Pakistan’s growth prospects. Energy demand is expected to double by 2030 with electricity capacity expected to exceed 30 gigawatts," the sources added The United States maintains that to alleviate the current crisis and meet the projection of future demand, Pakistan must implement meaningful market-based reforms to attract investment. Although, Pakistan has a substantial domestic gas resources, underinvestment in domestic exploration and production over time has left the country reliant on expensive imported fuel sources. The recent entry by Pakistan into international Liquefied Natural Gas (LNG) markets and the declining cost of renewable energy systems create the potential for Pakistan to alleviate the crisis and meet future demand in a financially realistic and sustainable way. The United States has proposed a new framework for US-Pakistan (and potentially donor -Pakistan) engagement in the energy sector. Under the framework, US will orient its future bilateral assistance on supporting the government of Pakistan’s efforts to implement market-based reforms necessary to facilitate and accelerate private investment in financially sound, clean energy projects, the sources continued. To this end, Washington has expressed its intention to deploy USAID, the US Department of Energy and the Overseas Private Investment Corporation (OPIC) and other investment tools towards a set of mutually reinforcing activities aimed at stimulating increased levels of private investment and with 3-5 years, adding at least 3 gigawatts of clean power to Pakistan''s national grid. The sources said, there are two reasons of this focus. First, moving the energy sector towards a more market-based situation is the best means of ending the current crisis and ensuring that future demand can be met. For example, instituting a market-based tariff structure of domestic gas exploration and production would foster expanded private sector development of Pakistan''s indigenous resources. Second, clean power investments in hydroelectric, wind, solar, biomass, and natural gas, combined with an expanded effort to improve the efficiency at all points of energy supply and water security, would promote innovation and growth. A guiding concept is that through increased private investment, privatisation of the distribution companies and improved governance, the fiscal burden of government subsidies would decrease and energy sector arrears (circular debt) could be reduced. According to Washington, privatization of state-owned generation and distribution companies will create space for expanded private management and investment in the sector. Increasing the market-basis of the energy sector will require the government of Pakistan to shift from an industrial policy approach towards a more appropriate, regulatory role. This new initiative is envisioned as a partnership based on a set of goals shared by Pakistan, the United States, multinational banks, other donors and the private sector. Without action and reform by the government of Pakistan, however, the initiative cannot succeed. Under this framework, the United States has proposed to work with the Government of Pakistan and international partners to: (i) strengthen regulatory institutions and develop market-base rules to attract private investment; (ii) commercialize and privatize distribution companies to improve efficiency and management and develop a plan to reduce and eventually eliminate energy sector arrears; (iii) develop an investment strategy for expanding the role of renewable energy systems including the necessary transmission projects to fully utilize these new sources; and (iv) mobilize in a systemic manner loans, grants, technical assistance, insurance and guarantee needed to manage and reduce private sector risks and leverage private capital into clean power projects. Using USAID''s Development Credit Authority (DCA) a legislative authority that permits USAID to issue partial loan guarantees to private lenders. In this instance, United States will work with investors, financial institutions and development organizations to support select private project developers that may need an additional guarantee to help the project reach financial closure.

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'China playing vital role in overcoming energy crisis'

China is playing vital role in overcoming the energy crisis by extending technical support for the production of cheap, environment-friendly and sufficient electricity along with affordable financing through the Bank of China, said Xianqing Luo Director Sales Megawatt New Energy Technology Company. He was addressing a function held at FCCI office. The technical team was also present here on Wednesday. He said that this company is in the process of installing 10,000 solar pumps ranging from 4-7.5KW in Balochistan. "We have a scheduled meeting with Chief Minister Punjab also to discuss similar options for the province of Punjab", he added. He said that megawatt was offering solar irrigation, on-grid and off-grid system in addition to water purification plants. Regarding solar system, he said that this technology is very cheap and the existing system could also be converted on the solar system. This company has already installed solar system in 40 countries including Turkey, Botswana, Chine and Ghana, he added. Engr Rizwan Ashraf welcomed the Chinese delegation and said that Pak-China friendship is time tested and recent visit of the Chinese President has clearly indicated that the new economic centres are emerging from this region. The investment of US $45 billion has also changed the image of Pakistan as one of the most lucrative investment destination and now the international community was also considering investing in Pakistan. Introducing Faisalabad, he said that it is the hub of textile industry contributing 60 percent of the total textile exports of the country. However, during last few years, we are facing acute shortage of energy and most of our industries are working on half of their installed capacity. He said that Chinese investment will not only resolve energy crisis but also gear up the pace of development in this region. He said that Almighty Allah has blessed Pakistan with unlimited resources of sun, wind and water. There is need to channelise these resources and get maximum benefit from these gifts of the nature. Amjad Saleem Group Director MAT Business Solution/Mega Engineering said that Chinese Company will not only provide technology but also extend loan on easy instalments through Bank of China. This will include 70 percent financing and 30 percent investment with a mark-up of rate of 9 percent. A presentation was also given on the various projects, technological breakthrough and financial offers of the Megawatt New Energy Technology Company. The function was also addressed by Sohail Ansari, President Sahiwal Chamber of Commerce and Industry who offered Chinese delegation to visit Sahiwal. Muhammad Amjad Khawaja of Khawaja Cotton also explained his personal experience of solar energy system in his factory and said that it is very beneficial but one time investment is a major problem for our industrialists. The function was also addressed by Zhao Yan Director Technical and Ms Chunjuan Nie General Manager Sales Megawatt New Energy Technology Company in addition to vice president Inaam Afzal Khan, Abdul Qayyum Sheikh and Mian Abdul Waheed.

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10600MW to be added to national grid by end-2017: Dar

Having planned to add about 10600 megawatts (MW) of electricity to the national grid by end 2017, the PML-N dominated federal government is all set to convene a parliamentary parties meeting to take the country''s political stakeholders in confidence on Pak-China Economic Corridor (PCEC). Federal Finance Minister Muhammad Ishaq Dar says various mega power projects are presently under implementation to not only bridge the existing 4500MW energy deficit but also cater to the additional demand for industrial sector. This the federal minister said while visiting Recorder House here Monday, April 27, which marks the 50th anniversary of Daily Business Recorder, the country''s first and largest financial newspaper. Of the total, Dar said, 3600MW would be produced through a single cycle LNG-fired power generation plants. While at least 7000MW would be generated through Neelum-Jehlum, Tarbela 4 and other mega projects that would be ready for commissioning within next 24-26 months. Some coal-based power projects also were underway which, the minister said, won''t be able to ready for generation by the government''s timeline. "If we properly pursue them (in terms of implementation) these would be ready at maximum by 2017," said Dar who has formed a special team of professionals which meets twice a month to monitor the completion of these ventures. The next 10 years would see the energy-scarce country generating 24000MW. Mainly financed by the Asian Development Bank (ADB), the government is also working on the transmission line required to support these projects in terms of supply. Further, the government is in talks with its Chinese counterpart for the import of 3000-4000MW of electricity from the latter''s province adjacent to Pakistan''s border. But such a plan would require the country a power transmission line from China to Pakistan that, Dar said, would be laid on a very difficult terrain. The job, the finance minister thinks, should be outsourced to the state-owned Chinese companies which had recently laid a Turkmenistan-Beijing pipeline within 18 months. "The annual revenue of those companies stand at $265 billion," he said. The issue Dar discussed with the Chinese president during the latter''s recent visit. Despite all these efforts, the country''s energy crises were far from resolution before end 2017, the federal minister stated categorically. Finance Minister also revealed that we will "cap solar and wind power". To a question on secrecy being maintained by the ministry of petroleum on the LNG import project, Dar said transparency would be ensured through sharing with public all the facts relating to the deal. In last Thursday''s parliamentary parties meeting, he said, some political leaders had voiced concern over the government''s perceived dubious stance over the route of the Chinese corridor and LNG imports. The finance minister then told the detractors that barring about $12 billion public sector investment, most of the investment for $46 billion PCEC projects would come from the "more efficient" private sector. "(In China) we have EximBank, CDB, ICBC a whole consortium in fact," he said. The minister hinted that the Chinese officials in a "very polite manner" had expressed concern over media reports claiming that recent Chinese president''s visit was Punjab-specific. "Chinese are very sensitive to media talks. We must not lose this opportunity," he warned. Then, he said, long-term projects like PCEC would outlive the PML-N''s ruling tenure and were therefore of a national character. Such reports, the minister said, were "presumptive misperceptions" based on an information gap that would be bridged in a parliamentary party meeting the federal government would be holding as soon as the prime minister comes home from abroad. In the meeting Planning and Development Minister Ahsan Iqbal would be making, what Dar said, a candid and detailed briefing to the political stakeholders. To a question, the minister said the issue of rupee-dollar parity might be hurting the country more because the dollar had gone stronger against the rupee. "Otherwise there is no problem". About the government''s devaluation plan, Dar said, the move never would favour the resource-constrained country which would lose Rs 65 billion for Re 1 devaluation. "Whenever devaluation is made the importers stand up to get half of the discount," he said. Besides, the minister said, devaluation of currency also affect adversely on the cost of production that further makes exports uncompetitive. Dar conceded that the country''s non-traditional exports worth Rs 250 billion were constantly coming down in volume. Besides energy crises, he said, this might be the result of overall decline in global commodity prices that had shocked the economies world over with Pakistan''s overseas importers having adjustments in their respective economies. "You know the Europe has to do QE (Quantitative Easing)," he said. The rupee, being dollar intervention-based, automatically appreciates with the rise of the dollar which, the minister thinks, is the one of the well-performing currency on the strength of the US economy and strengthening economy of the world. Given the fact that more than 85 percent of the country''s foreign debts stands dollar-denominated, it is not possible for the rupee to operate independently. "That''s why the country could never have had diversification of its (foreign exchange) reserves holdings," the finance minister said adding "Now I am asking SBP to manage the reserves properly." Proposing the involvement of strategic partners for the revival of loss-making PIA and PSM, Dar revealed that the EximBank in Washington was considering a long-term financing of up to $1 billion for Pakistan. "We have considered restarting long-term loan with you," the minister quoted the bank''s chairman as saying during his recent visit to the US capital. This funding, he hinted, might be used for putting the PIA and PSM back on track. About his government''s plans for the two PSEs, he said: "Let there be a new PIA and old PIA". The new company would have a fresh balance sheet inclusive of the value of the planes and air routes. This can be taken to the strategic partner, possibly a well-reputed airline, for the sale of 26 percent stakes of the new PIA. Suggesting the same fate to Steel Mills, he said a professional strategic partner could value-add to the mill which''s production capacity was currently staggering at 50 percent with its management trying hard to increase the same by 77 percent which is the break-even level. Drawn towards the contradictory provincial laws on the collection of sales tax on services that are hindering instead of facilitating the tax filers, Dar said FBR had ''virtually'' been playing the role of a collection agent for the provinces. The concept of sales tax on services is based on ultimate user. "No problem arises as long as the provinces do not trespass each other''s scope of collection". To facilitate taxpayers, the minister said, the provinces should have uniform tax rates and that the prevailing inter-provincial "distrust" must be overcome to resolve disputes. In their transition to revenue collecting authorities, the provinces, instead of taking a solo flight, should have engaged FBR, a far superior entity in tax collection, viewed the minister. Some politicians, he said, had a tendency to take political mileage out of the impression that Karachi generates 70 percent of the country''s revenues. "It is consumption and not collection that matters," the finance minister argued. About tax refunding, the finance minister said the government had cleared the refunds of about 26000 small filers, having claims of up to Rs 1 million, out of total 36000. In last budget, a queue was made to fast track the exporters'' refunds. But it is all computerised. The first in line is paid refunds," he said. To curtail the country''s ever-increasing imports, the minister said, the National Tariff Commission (NTC) had been revamped through revising the relevant laws and assigning a new working team. "For complying with WTO rules, the NTC would have to be proactive," he observed. Unlike past, the Economic Co-ordination Committee of the federal cabinet was meeting twice or thrice in a month to take up and resolve all the economic issues the nation was facing.

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Private electricity market on the cards

Ministry of Water and Power has prepared Electricity Act 2015, according to which private electricity market will be developed for trading, generation and distribution of electricity across Pakistan. Provincial governments will also establish their regulatory bodies and power despatch systems and privately owned Captive Power Plants (CPPs) will be allowed to sell electricity to consumers by using dedicated transmission lines to be established in accordance with the Act. According to the draft Electricity Act, a person may construct, maintain or operate a captive generating plant and dedicated transmission facilities in the area licensed to the individual by the Authority provided supply of electricity from the captive generating plant through the grid shall be regulated by the Grid Code. Well informed sources told Business Recorder that the draft of Electricity Act 2015 has been shared with provinces and other stakeholders prior to submission to the Federal Cabinet. The duties of the generating company will be to establish, operate and maintain generating stations, tie-lines, sub stations and dedicated transmission facilities. The federal government will establish at national level the National Load Despatch Centre for optimum scheduling and despatch of electricity. Presently, National Power Control Centre is performing this function. The National Load Despatch Centre will comply with such principles, guidelines and methodologies in respect of the wheeling and optimum scheduling and despatch of electricity as the Authority may specify in the grid code. The Centre will exercise supervision and control over the inter-provincial transmission system. The provincial government and provincial regulatory authority will facilitate and promote transmission, wheeling and inter-connection arrangements within its territorial jurisdiction for the transmission and supply of electricity by economical and efficient utilisation of the electricity. The provincial government will establish a centre to be known as the province load management despatch centre for the purpose of exercising the powers and discharging the functions. The provincial despatch load centre may levy and collect such fee and charges from the generating companies and licences engaged in intra-provincial transmission of electricity as may be specified by the provincial government and the provincial regulatory authority. Distribution of Electricity: It will be the duty of distribution licencee to develop and maintain an efficient, co-ordinated and economical distribution facilities'' in his area of supply in accordance with the provisions contained in the Act. Anything contained in any other law, the Authority may issue such directions as it considers appropriate to a licencee or a generating company if such licencee or generating company enters into any agreement or abuses its dominant position or enters into combination which is likely to cause an adverse effect on competition in electricity industry. A generating company may supply electricity to any licencee or consumer in accordance with the Act and the rules and regulations there under. The Ministry of Water and Power will, from time to time, in consultation with provinces, review or revise, the National Electricity Policy and tariff policy. In February 2015, the officials of Ministry of Water and Power informed the International Monetary Fund (IMF) that amendments to Penal Code 1860 and the Code of Criminal Procedures 1898 have been promulgated through Presidential ordinance. Currently, the Bill stands at the Senate Committee after the clearance of the National Assembly. The government was expecting that the Bill will be enacted by end-March, 2015. However, the Bill has not been approved by the Senate Committee so far. The government informed the IMF that in parallel, it has drafted the new Electricity Act to modernise governance of the sector and has circulated it to provinces for comments. The draft Act will be finalised and submitted to the Council of Common Interests (CCI) by end-February 2015 but this has also not materialised so far. Ministry of water and Power will work with the Ministry of Law on creating an effective system for handling cases related to electricity theft that can be effective by June 2015.

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Chinese firm, Wapda sign agreement

The Water and Power Development Authority has signed an agreement with the Power Construction Corporation of China to build a 132-kilowatt transmission line leading from the Duber Khwar Hydel Power Station to Dasu aiming to offer uninterrupted power in the current construction of the Dasu Hydropower Project. The contract, worth Rs 1.583 billion, includes procurement, design, supply, installation, stringing, testing and commissioning of the line from Duber Khwar to Dasu and a 132-kilowatt grid station in Dasu. The line and the grid station itself are expected to be completed in eight months. The WAPDA House hosted the signing between Dasu Hydropower Project General Manager and Project Director Haji Muhammad Farooq and Business Development Manager of Power Construction Corporation China Liu Zhong that also drew authority Chairman Zafar Mahmood, Water, Power and Finance Members Muhammad Shoaib Iqbal, Badrul Munir Murtiza and Anwar-ul-Haq. In his speech, the authority chairman said the line completion was would help make available the needed electricity on the start of civil works of the Dasu Hydropower Project and hoped that the contractor would follow the timelines of the contract and complete it in time. He also said on top of that his authority would use the line and the grid station to provide electricity to local residents.

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Punjab government sets up first solar power station of country: Shahbaz

Punjab Chief Minister Shahbaz Sharif, presiding over a high-level meeting through video link at Civil Secretariat, said Punjab government had set up the first solar power station of Pakistan at Quaid-e-Azam Solar Park, Bahawalpur. He said Punjab government had completed 100 megawatt solar power project with its own resources, adding the project which had been completed in a record period would soon be inaugurated. He said an important step had been taken towards eliminating loadshedding through planning of solar power stations. The Chief Minister said that setting up of solar power station in the desert of Cholistan brought hope of a bright future for the country. He said planning had also been made to set up solar power stations of 900 megawatt with the co-operation of China. Members Assembly congratulated CM Shahbaz Sharif on the completion of 100 megawatt solar power project in a record period and said Punjab government had achieved a big success in solar energy sector. Progress on the solar power projects being set up in the province was reviewed in the meeting. Provincial Minister for Minerals Chaudhry Sher Ali Khan, Chief Secretary, Member Assembly Chaudhry Khalid Mehmood Jujja, former MNA Saood Majeed, Chaudhry Arif Saeed, Secretaries of Energy and Information departments, Commissioner Bahawalpur and concerned authorities attended the meeting.

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IFC to invest $125 million in leading renewable energy company

IFC, a member of the World Bank Group, agreed on Wednesday to invest $125 million in a leading renewable energy company to support eco-friendly power projects in Pakistan, part of efforts to combat climate change and spur economic growth. President Mamnoon Hussain witnessed the contract signing. IFC will acquire a 15 percent stake in China Three Gorges, South Asia (CSAIL), a subsidiary of the China Three Gorges Corporation, a Chinese state-run firm. IFC's investment will support a series of hydro, solar, and wind power projects that will provide electricity to more than 11 million people, boost generation capacity by 15 percent, and cut the country's reliance on imported fossil fuels. "Pakistan is one of the most important overseas markets of CTGC," said Lu Chun, CTGC Chairman. "We are pleased to contribute to the development of Pakistan's economy, along with IFC. China Three Gorges South Asia Investment Limited will grow together with Pakistan's economy, and proactively explore new co-operation opportunities across the region." CSAIL is planning to invest $7 billion in Pakistan, the largest investment in the history of the country's power sector. CSAIL has already completed a 50 MW wind farm and has six other renewable projects in its pipeline, including three large hydropower projects. Once completed, those projects will add over 9,500 gigawatt hours to Pakistan's grid, boosting the country's output of renewable energy by a third. "Power shortages hinder social and economic development in Pakistan, despite the country's significant renewable energy potential," said Dimitris Tsitsiragos, IFC Vice President for Global Client Services. "This partnership fits with IFC's strategy of encouraging investments in emerging markets to transfer knowledge and expertise, and help make major projects a reality.-PR

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Finland-based consortium to invest $1 billion

A consortium of Finland-based companies announced to invest one billion dollar in the energy sector of Pakistan and offerred 1000 MW imported coal based power plant to the government. "The investors are waiting for the government nod after which the project would be completed in less than one year," said Wille Eerola Chairman of the Finland-Pakistan Business Council. In this regard two meetings with Prime Minister Nawaz Sharif has already been held, said Eerola while addressing a press conferece at the conclusion of second Finland-Pakistan Business Summit. Ambassador of Finland Rauli Suikkanen said that the role of Pakistan in stabilisation of region is very crucial. The country has a strategic importance as it is being surrounded by Iran, Afghanistan, China and India. Pakistani government has taken important decisions including military operation in North Waziristan and Rangers operation in Karachi to end terrorism which would help in building its good image, he added. Ambassador further said that due to security concnerns Pakistan image in Europe and US is not very good, however through increasing business activities it could be improved. He further said that Pakistani and Finnish companies could work together in various areas and bring solutions to Pakistan supporting the development of the whole country, especially in the energy and Clean Tech areas. "But Pakistani companies should also start to browse and research the Finnish and Nordic market for their products" said Eerola, adding that the first Business Summit held in 2014 hosted 100 attendees and a delegation of 10 companies from Finland. Earlier, Dr Miftah Ismail Minister of State of Investment appreciated the interest of Finnish companies in Pakistan. He said Pakistan is blessed with extensive natural resources and a young population which can meet the human capital needs of complex industries. Pakistan has the capacity and need to absorb trade, technology and technical expertise from all regions and we are particularly keen to encourage clean, environmentally friendly processes and energy efficient systems that Finland, and all of Europe, is renowned for, he added. "We do believe that real actions will create results and that''s why we are offering this platform for business people from both countries, highlighting the tremendous opportunities that exist for bilateral trade and investment", said Hassan Raza, Co-Chairman of the Finland-Pakistan Business Council. The participating companies from Finland included both large corporations and also SMEs representing around 23 billion Euros in annual revenue. Both private and public listed companies looking for opportunities and business partners in Pakistan were present, seeking to opening doors for Pakistani companies not only in Finland, but also in the larger Nordic market and the European Union. Bernard Najm, Vice President and Head of Middle East and Africa, Nokia Networks, said: "As a major Finnish telecom technology giant with a global footprint that includes in Pakistan, Nokia has a strong passion for innovation that expands the human possibilities of technologies in a connected world. Pakistan is a significant market for us, and we are committed to continue supporting the country with our innovation in telecommunication technologies to contribute to the socio-economic development of the people, he added.

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Finland-based consortium to invest $1 billion

A consortium of Finland-based companies announced to invest one billion dollar in the energy sector of Pakistan and offerred 1000 MW imported coal based power plant to the government. "The investors are waiting for the government nod after which the project would be completed in less than one year," said Wille Eerola Chairman of the Finland-Pakistan Business Council. In this regard two meetings with Prime Minister Nawaz Sharif has already been held, said Eerola while addressing a press conferece at the conclusion of second Finland-Pakistan Business Summit. Ambassador of Finland Rauli Suikkanen said that the role of Pakistan in stabilisation of region is very crucial. The country has a strategic importance as it is being surrounded by Iran, Afghanistan, China and India. Pakistani government has taken important decisions including military operation in North Waziristan and Rangers operation in Karachi to end terrorism which would help in building its good image, he added. Ambassador further said that due to security concnerns Pakistan image in Europe and US is not very good, however through increasing business activities it could be improved. He further said that Pakistani and Finnish companies could work together in various areas and bring solutions to Pakistan supporting the development of the whole country, especially in the energy and Clean Tech areas. "But Pakistani companies should also start to browse and research the Finnish and Nordic market for their products" said Eerola, adding that the first Business Summit held in 2014 hosted 100 attendees and a delegation of 10 companies from Finland. Earlier, Dr Miftah Ismail Minister of State of Investment appreciated the interest of Finnish companies in Pakistan. He said Pakistan is blessed with extensive natural resources and a young population which can meet the human capital needs of complex industries. Pakistan has the capacity and need to absorb trade, technology and technical expertise from all regions and we are particularly keen to encourage clean, environmentally friendly processes and energy efficient systems that Finland, and all of Europe, is renowned for, he added. "We do believe that real actions will create results and that''s why we are offering this platform for business people from both countries, highlighting the tremendous opportunities that exist for bilateral trade and investment", said Hassan Raza, Co-Chairman of the Finland-Pakistan Business Council. The participating companies from Finland included both large corporations and also SMEs representing around 23 billion Euros in annual revenue. Both private and public listed companies looking for opportunities and business partners in Pakistan were present, seeking to opening doors for Pakistani companies not only in Finland, but also in the larger Nordic market and the European Union. Bernard Najm, Vice President and Head of Middle East and Africa, Nokia Networks, said: "As a major Finnish telecom technology giant with a global footprint that includes in Pakistan, Nokia has a strong passion for innovation that expands the human possibilities of technologies in a connected world. Pakistan is a significant market for us, and we are committed to continue supporting the country with our innovation in telecommunication technologies to contribute to the socio-economic development of the people, he added.

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900 megawatts solar power project to be launched by Chinese company

The 900MW largest solar power project would be launched in Pakistan with an investment of $1.5 billion by the Chinese company Zonergy Limited. Talking to a group of journalists, President Zonergy Yu Yong revealed that this project would be developed with a cutting edge technology and the equipment would be procured from the renowned manufacturers of Europe and China. The 900MW solar project would be constructed in three phases and is projected to connect to the national grid by the end of 2016. It will be financed by Chinese financial institutions. The first 50MW will be put into the national grid by end-August 2015, an additional 250MW by the end of December 2015, thereafter every month 100MW will be added to the national grid. This 900MW project would be located in QA solar Park in Bahawalpur, Punjab, with a total area of 4500 acres. An annual amount of 1.271 billion KWh of electricity is expected to be generated from this solar power station, which will greatly relieve the power shortage in Punjab and neighbouring areas. This project will also promote local economic development and improve people''s livelihood. At least 3300 job opportunities will be created directly. After the entire 900MW is connected to national grid, 394,000 tons of standard coal will be saved and 826,000 tons of carbon dioxide will be reduced every year. This solar power station will become a "solar oasis" in CPEC and inject new energy for deepening China-Pakistan friendship. It has been listed in early harvest projects under "China Pakistan Economic Corridor" (CPEC) roadmap and considered as one of the key initiating projects in "one road one belt" national development Plan. Yu Yong, President Zonergy, said that this project has great economic and political significance as it has been listed in early harvest projects in CPEC. The investment and construction of this global single largest solar power project raises high level requirements on capital, technology and management for Zonergy. With comprehensive management advantages and international projects development experiences, Zonergy is confident to build this project to be an exemplary one in CPEC projects and a new highlight in China-Pakistan friendship. President Zonergy further stated that efficiency of government departments in Pakistan has improved. He also appreciated the political leadership for extending full co-operation to materialise the project. In reply to a question, he said, ZTE is not the only investor in Zonergy but the main shareholder. He said the company''s business is to establish solar power plants and its maintenance. With regard to inter-connection of solar power with the national grid, he said, Chinese and Pakistanis engineers will do this job collectively as inter-connection of solar and the traditional electrical system requires highly technical experts. Solar is not the only business of the company but certainly it is the major pillar of its business. The biggest solar power plant is of 1200-MW capacity. Chinese banks expressed concerns on the high cost of maintenance of solar power plant but ultimately they agreed to invest in Pakistan, he added.

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CASA 1000: Core project pacts to be inked in Turkey on April 23

Core project agreements of the long-awaited Central Asia South Asia 1000 (CASA 1000) will be signed on April 23-24, 2015 in Turkey, official sources told Business Recorder. Minister for Water and Power, Khawaja Asif, Additional Secretary Incharge Ministry of Water and Power, Younus Dagha and Managing Director National Transmission and Despatch Company (NTDC) will represent Pakistan. Other participating countries will also be represented by their Energy Ministers and higher officials. The core project agreements consist of Four Power Purchase Agreements (PPAs) between respective countries; a Master Agreement between all four parties; an Account Bank Agreement; Technical Code; Co-ordination Agreement between Kyrgyz Republic and Tajikistan and Host Government Agreements. The tariff components of CASA 1000 project consist of: (i) transmission tariff payback of investment costs to Tajikistan, Kyrgyzstan, and Afghanistan, AC & DC O&M cost, community support fund and common fund; (ii) cost of energy payable to the sellers; and (iii) transit fee to be paid to Afghanistan. The estimated transmission tariff is 2.98 cents/kWh; the energy tariff is 5.15 cents/kWh and the Afghan transit fee is @ 1.25 cents/kWh. According to sources, all outstanding issues were resolved in the JWG/IGC meeting in Istanbul early December 2014 followed by the LSC/JWG meeting in Bishkek in February 2015. The CASA 1000 transmission project envisages the transportation of surplus electric power available in summer months (May 1 to September 30) from Kyrgyz Republic and Tajikistan to Afghanistan and Pakistan. The project will comprise the development, financing, construction, ownership and operation of the following AC and DC facilities: (i) a 750km high voltage direct current transmission system between Tajikistan and Pakistan via Afghanistan together with associated converter stations at Sangtuda (1,300MW), Kabul (300MW) and Peshawar (1,300MW). Pakistan has decided to increase capacity of convertor aimed at getting electricity over and above 1000 MW in case Kabul does not use its entire share of 300 MW; (ii) 477km 500kv alternating current link between the Kyrgyz Republic (Datka) and Tajikistan (Khoujand); and (iii) AC system upgrades necessary to safely and reliably accommodate the AC and DC Facilities and the associated power flows. The CASA 1000 Transmission line (T/L) to Peshawar would be capable of delivering 1300 MW (1,000 MW is Pakistan''s share & 300 MW is Afghanistan''s share however, the Afghan share may be available for Pakistan as Afghanistan may not need the power in near future). The exporting countries (Kyrgyz Republic & Tajikistan) have conveyed that they will be able to deliver 4,000 GWh of energy in a normal year and 4,434 GWh in a wet year. The estimated cost of the CASA-1000 project is $1.170 billion including $208 million IDC & taxes-but the final cost will be determined through a competitive bidding process. This includes the estimated cost of $200 million required for the Pakistan portion of the DC transmission line and convertor station. The CASA-1000 project will be implemented as a contractual joint venture in which all four participating countries will own the parts of the project located in their respective countries. The World Bank in its Board of Directors meeting on 27 March, 2014 has approved $120m in IDA credit for Pakistan while 1DB has indicated $35 million. EAD has been requested to arrange the rest of the amount US$142 million. The source said, tender documents for the owners, engineer, EPC contracts of convertor stations and Afghan DC O&M are due to be awarded by May 2015. The construction start is expected in September 2015 and project completion is expected by May 2018. Slippage in timelines could occur if the DC convertor stations and Afghan transmission line''s EPC contracts are not awarded in the next 2-3 months, the sources added.

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4500MW Diamar Bhasha Dam project: South Asia Investment Fund being established

China Three Gorges Corporation, International Finance Corporation (IFC), an arm of World Bank, and Silk Route Fund would establish a fund for Pakistan titled South Asia Investment Fund (SAIF) which will provide funding for 4500 MW Diamar Bhasha Dam, well informed sources toldBusiness Recorder. The representatives of the three institutions will sign shareholding agreement on April 22, 2015 in the Presidency which will be witnessed by President Mamnoon Hussain. It is unclear how much share the three institutions will have in the SAIF. According to sources, the representatives of the three institutions will arrive in Pakistan on Monday (today) when the Chinese President would also be in the capital. However, the shareholding agreement will be signed after the departure of Chinese President. "It will be a big event and very important from Pakistan''s perspective," the sources continued. The sources said, China Three Gorges Corporation will sign a non binding MoU with Water and Power Development Authority (Wapda) for construction of Diamar Bhasha Dam and other mega projects to be funded from SAIF. Wapda, sources said, maybe unaware of the new Fund for Pakistan which analysts state implies that the matter is being dealt with by the Ministry of Water and Power. China Three Gorges Corporation has shown an interest in developing hydel resources of Pakistan. However, the details of the project assistance will be in accordance with the law and opportunities will be given to all potential parties. It cannot be given to the Three Gorges by depriving others under the law. "We will encourage the Chinese to invest in development of hydel resource of Indus cascade," the official maintained. Wapda, sources said, has also prepared a policy to develop hydel resources expeditiously which is yet to be approved by the Economic Coordination Committee (ECC) of the Cabinet. China Assistant Foreign Minister said last week that China does not plan to use either its new Asian Infrastructure Development Bank (AIIB) or Silk Road fund to finance the $46 billion Pakistan-China Economic Corridor, and the funds would come from the two countries instead.

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Power generation K-Electric plans to invest $2 billion: CEO

Chief Executive Officer (CEO) K-Electric Tayyab Tareen has said that the power utility had planned to invest $2 billion in power generation in the next four years. Speaking at a meeting of Korangi Association of Trade and Industry (KATI), he said that K-electric had already invested one billion dollars in power generation and up-gradation of distribution system. He said that for the last 10 years power loadshedding had been at its peak due to issues of power generation, transmission, distribution and other problems. However, Tareen said, at present 59 percent area of Karachi including four industrial zones were exempted from loadshedding and by 2018 another 700 MW would be generated from coal-based plant under agreement with a Chinese company which would result in lowering K-Electric tariff. He further said in future new circuits and ABC cabling would be installed with an investment of $400 million. He said that at present K-Electric was facing 23 percent line losses where the demand of electricity had reached 3000 MW in May and June. Tareen said that the K-electric was eager to increase its capacity and many new agreements were being signed. Patron-in-Chief KATI S.M. Muneer said that corporate culture has been introduced in K-Electric and issues of electricity were being reduced. He said that distribution network of K-Electric was much better as compared to other cities of Pakistan. President KATI Rashid Ahmed Siddiqui said that K-Electric was doing a good job under its Chief Executive Tayyab Tareen and soon the city would witness zero loadshedding. "At present Korangi industrial area is exempted from loadshedding, however, the industrialists are concerned due to shortage of water," he added. Senator Abdul Haseeb Khan, Zubair Chhaya, Najmul Arfeen, Abdul Sami Khan, Syed Farukh Mazhar, Johar Ali Qandhari, Ehtesham Uddin, Danish Khan, Zahid Saeed and others were also present on the occasion.

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Dasu Hydropower Project, CASA 1000: Dar thanks MD World Bank for support

Federal Minister for Finance Senator Mohammad Ishaq Dar on Monday thanked MD World Bank for her support for Dasu Hydropower Project and CASA 1000 which are on track. The Federal Minister stated in a meeting with Sri Mulyani Indrawati, MD World Bank and discussed the World Bank programme portfolio in Pakistan. Finance Minister stated that CASA 1000 project signing ceremony is scheduled for next week and the project will improve regional integration. Finance Minister expressed hope that World Bank will continue to support Pakistan in its reforms for energy sector and economic growth. Sri Mulyani Indrawati congratulated Finance Minister on successful 6th review of IMF programme and expressed hope that Pakistan will continue its economic policies and reform agenda. She said that it was heartening that Pakistan was able to meet all performance criteria for 6th review which proved that economy is on right path. She stated World Bank is examining two interventions to support Pakistan to continue reforms in energy sector and boost growth. She said that World Bank is glad to be Pakistan's partner in development and wanted to resolve problems in energy sector. She reiterated that World Bank wanted to ensure inclusive growth and observed that the proposed interventions would bring further reforms in energy sector and take growth to a higher trajectory.

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Prime Minister vows to complete energy projects

Prime Minister Nawaz Sharif has vowed to complete energy projects under China-Pakistan Economic Corridor (CPEC) in time. Prime Minister, talking to a delegation of three leading Chinese companies Huaneng Group, Industrial and Commercial Bank of China (ICBC), and Zonergy Corporation, stated that Pakistan is facing acute shortage of energy and government has committed to overcoming the problem during its current tenure in office. Nawaz Sharif appreciated that these companies are entering into agreements for undertaking various projects in Pakistan, including those that are part of CPEC. The government would extend all possible facilitation to Chinese companies. "We will work hand in hand with you to remove any obstacle to ensure timely completion of the planned projects," he said, adding that the increased linkages among the business communities of the two countries would further strengthen bilateral ties. He said the visit of the Chinese President will usher in a new era of development in Pakistan and open a new chapter in bilateral relations between the two countries. The Prime Minister was pleased that ICBC, the largest bank in the world, will look into the possibility of setting up economic zones in Pakistan and encourage Chinese businesses to invest here. The delegations stated that the strong Pakistan-China friendship provides an excellent platform for boosting business relations between the two countries and said they are very happy to be part of building the China-Pakistan Economic Corridor. Federal Minister for Water and Power Khawaja Asif, Chief Minister Punjab Shahbaz Sharif, Pakistan''s Ambassador to China Masood Khalid and Secretary Water and Power Younus Dagha also attended the meeting.

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51 accords, MoUs signed

Pakistan and China on Monday signed as many as 51 agreements and Memoranda of Understanding (MoUs) on co-operation in energy, road, infrastructure and other areas. The signing ceremony by relevant ministers was witnessed by Prime Minister Nawaz Sharif and Chinese President Xi Jinping, who also jointly performed ground-breaking of Karot 720 MW Hydropower project, Dawood 50 MW Wind-power project, Sachal 50 MW Wind-power project, Zonergy 900 MW solar project and Jhimpir 100 MW Wind-power project via a video link. The two countries also concluded a number of documents, agreements/MoUs relating to several important areas including development projects in the infrastructure, energy, and communication sectors under China-Pakistan Economic Corridor. The documents signed by the two sides include; (1) Joint Statement between China and Pakistan on establishing the all-weather strategic co-operative partnership;(2) Minutes of the 4th JCC of China-Pakistan Economic Corridor;(3) Economic and Technical Co-operation Agreement between China and Pakistan; (4) an exchange of notes of feasibility study of the demonstration project of the DTMB between China and Pakistan; (5) an exchange of notes on provision of anti-narcotics equipment between China and Pakistan; (6) an exchange of notes on provision of Law Enforcement Equipment between China and Pakistan; (7) an exchange of notes on a feasibility study of Gwadar Hospital between China and Pakistan; (8) an MoU on provision of Chinese governmental concessional loan for the second phase of upgradation of Karakorum Highway (Havelian to Thakot) between Ministry of Commerce of China and Ministry of Finance and Economic Affairs of Pakistan; (9) an MoU on provision of Chinese governmental concessional loan for Karachi-Lahore Motorway (Multan to Sukkur) between Ministry of Commerce of China and Ministry of Finance and Economic Affairs of Pakistan; (10) an MoU on provision of Chinese governmental concessional loan for Gwadar port East Bay Expressway Project between Ministry of Commerce of China and Ministry of Finance and Economic Affairs of Pakistan; (11) an MoU on provision of Chinese governmental concessional loan for Gwadar International Airport between Ministry of Commerce of China and Ministry of Finance and Economic Affairs of Pakistan; (12) a protocol on banking services to agreement on trade in services between Pakistan and China; (13) an MoU on provision of Material for Tackling Climate Change between National Development and Reform Commission of China and Ministry of Finance (EAD) of Pakistan; (14) a framework agreement on co-operation on major communications infrastructure project between China and Pakistan; (15) an MoU on Co-operation between NDRC of China and ministry of Planning Development and Reform of Pakistan; (16) an MoU on Pro Bono Projects in the Port of Gwadar Region between Ministry for Planning, Development and Reform of Pakistan and the International Department of the Central Committee of the Communist Party of China; (17) an MoU on the establishment of China-Pakistan Joint Cotton Bio-Tech Laboratory between the Ministry of Science and Technology of China and the Ministry of Science and Technology of Pakistan; (18) a framework agreement between the National Railway Administration, China and the Ministry of Railways, Pakistan on a joint feasibility study for upgradation of ML1 and establishment of Havelain Dry port of Pakistan Railways; (19) a protocol on the establishment of China-Pakistan Joint Marine Research Centre between State Oceanic Administration of China and the Ministry of Science and Technology of Pakistan; (20) an MoU on co-operation between the State Administration of Press, Publication, Radio, Films and Television of China and Ministry of Information, Broadcasting and National Heritage of Pakistan; (21) a triple party agreement between China Central Television and PTV and Pakistan Television Foundation on the re-broadcasting of CCTV-NEWS/CCTV -9 Documentary in Pakistan; (22) a protocol on establishment of Sister Cities Relationship between Chengdu city Sichuan Province of PRC and Lahore City; (23) a protocol on establishment of Sister Cities Relationship between Zhuhai City, Guangdong province of China and Gwadar city, Balochistan of Pakistan; (24) a protocol on establishment of Sister Cities Relationship between Karamay City, Xianjian Ugur, autonomous region of China and Gwadar city; (25) a framework agreement between NEA and MoPNR on Gwadar-Nawabshah LNG Terminal and Pipeline Project; (26) a commercial contract on Lahore Orange Line Metro Train Project; (27) an agreement on financing for Lahore Orange line Metro Train project;(28) MOU on financing for KKH up-gradation Phase-2 (Havelian to Takot), KLM, Gwadar East Bay Expressway, Gwadar International Airport Projects; (29) a financing agreement relating to the 870 MW Hydro-Electric Suki Kinari Hydropower Project between EXIM Bank of China, Industrial and Commercial Bank of China Limited and SK Hydro (Private) Limited; (30) a financing co-operation agreement between the EXIM Bank of China and Port Qasim Electric Power Company (Private) Limited (on Port Qasim 2x660MW Coal-fired Power Plant; (31) a framework facility agreement on 720MW Karot Hydropower Project between China Development Bank Corporation, EXIM Bank of China and Karot Power Company (Private) Limited; (32) a term-sheet of the facility for Zonergy 9x100 MW solar project in Punjab between China Development Bank Corporation, EXIM Bank of China and Zonergy Company Limited; (33) a drawdown agreement on Jhimpir wind power project between UEP Wind power (Private) Limited as Borrower and China Development Bank Corporation as lender;(34) Terms and Conditions in favour of Sindh Engro Coal Mining Company for Thar Block II 3.8Mt/a mining Project, Sindh, arranged by China Development Bank Corporation; (35) Terms and Conditions in favour of Engro Powergen Thar (Private) Limited, Sindh for Thar Block II 2x330MW Coal-Fired Power Project Arranged by China Development Bank Corporation; (36) a framework agreement of financing co-operation in implementing China-Pakistan Economic Corridor between China Development Corporation and HBL; (37) an MoU with respect to co-operation between Wapda and CTG; (38) an mOU among PPIB, CTG, and Silk Road Fund on Development of Private Hydropower Projects; (39) a facility operating Agreement for Dawood Wind Power project between ICBC and PCC of China and HDPPL; (40) a framework agreement for promotion of Chinese investments and industrial parks developments in Pakistan between ICBC and HBL on financial services corporation; (41) a financing term-sheet agreement on Thar Block-I between ICBC, SSRL; (42) an Energy Strategic Co-operation Framework Agreement between Punjab Province of Pakistan and China Huaneng Group; (43) a framework agreement on China-Pakistan Economic Corridor Energy Project Co-operation between Ministry of Water & Power and China Export & Credit Insurance Corporation (SINOSURE); (44) a co-operation agreement between Sino-Sindh Resources (Pvt) Ltd and Shanghai Electric Group for Thar Coalfield Block I Coal-Power integrated Project in Pakistan; (45) a co-operation agreement on Matiyari-Lahore and Matyari (Port Qasim)-Faisalabad Transmission and Transformation Project between National Transmission Distribution Company (NTDC) and National Grid of China;(46) IA on Port Qasim Coal fired Power Plant between Power China and GoP; (47) a facility agreement on Sahiwal Coal-fired Power Plant Project between Industrial and Commercial Bank of China Limited, Huaneng Shandong Electricity limited and Shandong Ruyi Group; (48) a co-operation agreement on Hubco coal-fired Power Plant Project between CPIH and Hubco Power Company; (49) Facilitation Agreement on Salt Range Coal-fired Power Project between CMEC and Punjab Government; (50) an MoU between NUML Pakistan and Xinjiang Normal University, Urumqi China for Co-operation on Higher Education; (51) an agreement on collaboration on establishment of NUML International Center of education (NICE) between NUML Pakistan and Xinjiang Normal University, Urumqi, China. On this occasion, the two leaders inaugurated the following projects by unveiling plaques; (1) Industrial and Commercial Bank of China, Lahore Branch; (2) Energization of 100 MW solar power plants at Quad-i-Azam solar park, Bahawalpur; (3) FM 98 Dosti Channel studio PBC-CRI, Islamabad. 4. Demonstration project of DTMB Broadcasting in Pakistan;(5) China Cultural center Pakistan;(6) China-Pakistan Joint Research Center for small hydropower, Islamabad;(7) China-Pakistan cross-border optical fiber cable system project;(8) Metro rail transit system on the Orange Line in Lahore.

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China to invest $37 billion in energy projects

Out of the total $45 billion investment in Pakistan, China will invest up to $37 billion in various energy projects while give $8 billion concessional loan for infrastructure development projects of Pak-China Economic Corridor project. This was stated by Ahsan Iqbal, Minister for Planning, Development and Reforms while speaking at a press conference along with Information Minister Pervez Rashid and Prime Minister''s Special Assistant on Foreign Affairs Tariq Fatemi, here on Friday. Briefing journalists about the two-day state visit of Chinese President Xi Jinping, who will arrive here on Monday, Ahsan Iqbal said that the investment in energy and infrastructure projects would be done by the Chinese companies and the Chinese banks will provide loans. To a question about the exact mark-up rate of the loan, Ahsan Iqbal did not divulge the exact rate but added that the markup of the concessional loan being acquired for the infrastructure projects will be much lesser than the market rate and it will be for a period of 15 to 20 years. He said that the government was trying to give maximum share to the private sector to invest in these projects. About completion of the energy projects, he said most of the coal projects would be completed in three years while the projects related to wind and solar will take up to one year to be completed. He said that the energy projects with Chinese support would generate a total of 16,500MW electricity, adding the work on 10,400 MW projects would be completed by 2018 in the first phase. While projects of 60,00MW will be completed in the second phase, he added. In Thar, Ahsan said that 10 coal-based power plants will be installed on commercial basis which will generate up to 6,600MW electricity from coal. To a question, he rejected the controversy around various projects, saying that all the concerned provinces have been consulted on the energy projects. According to him, projects of 8,500 MW will be undertaken in Azad Jammu and Kashmir while there are various hydel projects in Khyber Pakhtunkhwa, coal in Sindh, Balochistan and Punjab. When asked why the chief ministers of other provinces other than Chief Minister Punjab Shahbaz Sharif were not being involved in the ongoing dialogue with Chinese government, he advised media to avoid making things controversial through such questions. "Shahbaz Sharif is indeed brother of Prime Minister Nawaz Sharif but he [Shahbaz Sharif] has a good political repute and Pak-China relations are not confined to the government of any particular party in the country," he remarked. He maintained that the reservations of the political parties on the route of Pak-China Corridor have mostly been addressed in a meeting with representatives of the political parties on Wednesday. He said that three basic routes of the project, the Western route which will link D.I. Khan with Gwadar via Qila Saifullah, Zhob and Quetta, adding there was a missing link of 400 KM between Sorab and Gwadar and work on it has already been started by FWO last year and would be completed by 2016. He said that the 124 KM road from Quetta and D.I. KHAN is being upgraded with the help of Asian Development Bank while the road between Multan and Quttta is being upgraded with the help of Japan. The second route, according to him, will be from Gwadar to Rato Dero and Sukkur via Indus Highway and the third route, which can be called as Eastern route, will be from Gwadar to Sukkur via Motorway from Peshawar and Lahore to Karachi, adding the work on all the routes has been started. "Gwadar...Pak-China Corridor is not just a route but it is a framework and an umbrella, which will enable access to various markets," he said, adding that China is linking its Eastern corridor with its Western where Pakistan is not the only route for the Chinese. "There are other routers as well for the Chinese government but we''ve to undertake this project for our own interest to link our economic development with China without going into any controversy," he added. The minister maintained in the next 10 years, Gwadar will be a leading "Port City" on the patron of Singapore and Dubai. About the security to the Chinese, he said that the prime minister was going to constitute a special security force along with the army to provide security to the Chinese investors and the people associated with the projects. When asked whether the Chinese government has also shown interest in construction of the pipeline of the Iran-Pakistan (IP) gas pipeline project on Pakistan''s side, the Minister said that the Chinese government will only fund the power transmission line coming from Iran and not the pipeline of IP gas project.

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Energy sector: Denmark can extend co-operation: envoy

The bilateral trade between Pakistan and Denmark has inclined to 13 percent in the last year. Denmark can extend co-operation to Pakistan in energy sector this was stated by Ambassador of Denmark Jesper Moller Sorensen in a reception organized by Muhammad Iqbal, Chief Executive of Zam Zam Group. Senior Vice President FPCCI Abdul Rahim Janoo, Chairman FPCCI Standing Committee on Diplomatic Affairs Ishtiaq Baig also exchanged views while Chairman IATA Agency Programme Joint Council Pakistan and Chairman FPCCI Standing Committee on Aviation Mohammad Yahya Polani, Haji Masood Parekh, President KCCI Iftikhar Vohra and other leading business persons were also present. Danish Ambassador Jesper said that Danish Pharmaceutical industry operates and manufactures based on research exports to countries world-wide including Pakistan. He said that Danish Government appreciates democracy in Pakistan and supports Pakistan's Youth Parliament. He also emphasised business opportunities in the sectors of dairy and pharmaceuticals. Muhammad Iqbal, Chief Executive of Zam Zam Group articulated that Pakistan imports from Denmark live saving drugs manufactured on the basis of research. He urged the government to activate Drug Regulatory Authority and eliminate 10 percent duty on life saving drugs. He underscored on the need of exchange of business delegations in view of immense potential of business existing between the two countries.-PR

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Hamza says energy crisis could end by 2018

The central leader of PML-N Hamza Shahbaz Sharif has expressed the hope that the energy crisis will be eliminated from the country by 2018. "Work on the LNG, solar park and coal-based energy projects is continuing speedily," he said while talking to a delegation of PML-N Lawyers' Forum at Model Town office on Wednesday. President PML-N Lahore Pervaiz Malik, Naseer Ahmed Bhutta and office-bearers of lawyers' organisations were present on the occasion. Hamza said, "PML-N government has started a project of provision of potable water at a cost of Rs 12 billion in all 36 districts of the province which will be completed by 2017. This project is being started from South Punjab". He said the project of economic corridor from China to Gwadar will prove to be a game changer for Pakistan in this region due to which durable economic revolution will be brought in the country. He said that PML-N government has made tremendous achievements in the war against terrorism. He said that terrorists have been defeated. Hamza Shahbaz said that the entire nation is committed to fight this war till the elimination of last terrorist. He said that instead of doing politics for the next ten years, present government is working to achieve the target of making the country socio-economically a big force of the region. He said that sacrifices and struggle of the lawyers for the stability of democracy in the country could not be forgotten. He said that PML-N leadership is working round-the-clock for the development of the country. He said that those taking U-turn created hurdle in the development of the country and they would be held accountable by the nation in coming elections. He said that PML-N believes in delivery and good governance. He said the government has started projects of billions of rupees with the help of China to eliminating energy crisis. Hamza Shahbaz said that previous governments did not pay any attention to this serious problem. He said that this is the credibility of PML-N government that a number of countries including China are making investment without any hesitation in development projects of billions of rupees in Pakistan and people will benefit from these projects. Hamza Shahbaz said that provision of jobs to labourers, restoration of respect of green passport and the image of the country in the comity of the nations is agenda of PML-N government. Hamza Shahbaz stressed upon lawyers' community to fight the case of the country with devotion, dedication and commitment and play their due role for the development of the country. He assured that all possible steps will be taken for resolution of problems of lawyers' community.

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World Bank discussing energy reform plan: expert

The World Bank is discussing energy reform programme with Pakistani authorities, proposing to place ceiling on circular debt, which reached about 1% of GDP by the end of February 2015. This was stated by Richard Jeremy Spencer, a WB energy specialist, during an online discussion on the topic of "Circular Debt in Pakistan". Spencer leads the Bank''s support to Pakistan''s energy sector, including helping with reform of the electric power sector and also works on energy projects in Afghanistan. "The idea of a ceiling is under discussion, but a plan that addresses a more permanent solution has to accompany it," said Spencer, adding that the permanent solution to overcome circular debt is to remove the causes. There are many of these and they will not easily be addressed - there are no quick fixes. He further said that subsidies do distort the market and result in inefficient consumption of electricity. Pakistan has done well to bring them down considerably in the last couple of years - can it be right that the biggest consumers of electricity - people using more than 300kWh per month of electricity (enough to live comfortably even in Pakistan''s summer) were getting something like 60% of the subsidies, while the consumers who only use 50kWh/month were only getting 5%? Spencer said targeted subsidies which support government policy are justified. The problem with all subsidies is making sure that they get to the right people and that they do not cost more than the government can afford. A better way of helping the poor is through income support schemes such as BISP because with cash they can choose whether to buy more electricity or, say send their daughter to school - a choice which an electricity subsidy doesn''t give, he added. The surcharges are relatively low - in total less than Rs 2/kWh. He said he can only remember the exact level of one which was the Neelum-Jhelum surcharge which was Rs. 0.10/kWh. The evidence suggests that reducing surcharges would not help mitigate circular debt. The energy expert said Punjab has least to fear in terms of the liability that the Discos represent - whereas KPK, Sindh and Balochistan have Discos which perform badly and would require a significant subsidy from provincial budgets. Clearly though this is a political problem and one that will only be decided by politicians. Spencer said tariffs are already at different levels for commercial and industrial users compared with residential, with broadly speaking the latter paying less. For economic efficiency, consumers must pay what it costs to supply them. There is need to get the electricity from the generation plant (whether hydro or thermal) to the consumer - so you have to improve transmission and distribution. Then you have to make sure none of it is stolen on the way. When you have got it to the consumer you have to make sure he is billed and that he pays promptly. You also have to make sure that government or others do not impose additional costs on this chain for which they do not pay. Undoubtedly the transmission and distribution infrastructure is old and does not have sufficient carrying capacity to meet demand. This gets worse in summer when demand goes up while the capacity goes down (because transformer loads must be limited to prevent overheating). Investment in the T&D infrastructure will reduce losses, which means more electricity will be available for sale. Demand side energy efficiency efforts always help, regardless of the level of losses and is the first-best solution as it is often the lowest cost. The important point is that the Discos need to have the power to enforce payment and to cut people off if they do not. Really it must not be the concern of the government but of the management of Discos, he stated. The use of expensive fuel sources has two effects on the circular debt. First, it makes electricity more expensive and therefore increases the incentive for people to steal electricity or not pay their bills when they receive them. Second, the value of the electricity not paid for is higher, and therefore the circular debt is higher. So it is part of the story, but really the main reason for the circular debt arising is because not all costs are recovered in the tariff, and then not all bills are paid. Nepra independence will be very important for privatisation. The privatisation process has been stalled, and plainly privatisation is a politically challenging thing to try. The amount payable by distribution companies to their suppliers was about Rs 278 billion at the end of February. This is not quite the same as the circular debt because this Rs 278 billion includes amounts not yet due. There is a need for a hydrothermal system but some hydro can be baseload (Dasu will run 85% of the time). We can argue about costs of hydro forever, but our appraisal of Dasu - which the World Bank is financing - suggests levelized cost of around 3 cents/kWh., Spencer concluded.

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Coal-fired power project: Chinese group plans to make investment

State-run Power Construction Corp of China Ltd plans to invest in a $2.1 billion coal-fired power project in Pakistan as part of a broad economic cooperation between Beijing and Islamabad, the company said on Thursday. It will get a 51 percent stake in the project near Karachi, while Qatar''s Al Mirqab Capital will own the remaining 49 percent, Power Construction said in a filing with the Shanghai bourse. The Chinese company will be responsible for construction and operation of the project, which is scheduled to be completed within 32 months and will mainly use coal from Indonesia. The project, including the installation of two 660-megawatt high-efficiency power units known as super critical generators, will be part of a broad bilateral deal dubbed as China-Pak Economic Corridor, Power Construction added. Under the deal, the Chinese government and banks will finance Chinese companies to build $45.6 billion worth of energy and infrastructure projects in Pakistan over the next six years. The deal further cements ties between Pakistan and China at a time when Pakistan is nervous about waning U.S. support as troops pull out of Afghanistan. The coal-fired power project will require a total investment of $2.085 billion, nearly $1.6 billion of which will be funded with loans, according to the filing.

Copyright Reuters, 2015

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132 KV AKU Grid Station inaugurated

The K-Electric inaugurated a 132 KV Aga Khan University Grid Station, worth a total investment of Rs1 billion, at a ceremony. With its completion, the Grid Station will improve reliability and continue to supply uninterrupted power to AKU and the University Hospital, with further benefits extending to consumers as well. "This grid will relieve the overloaded grids of Civic Centre, Baloch Colony and Gulshan-e-Iqbal and will also partially meet the requirement of future load growth in PECHS, Bahadurabad, KDA Scheme 1 and its adjoining areas," said K-Electric's spokesperson in a press statement. Addressing the ceremony, CEO K-Electric Tayyab Tareen said: "AKU and its teaching hospital is quite literally an institution keeping the citizens of Karachi alive, and we at KE recognised the importance of a smooth and dedicated supply of power for its optimal operations." He also stated that this move was aligned with the company's philosophy of continuing to become a more consumer-centric company. The initial agreement to build a grid station to provide a stable supply of electricity to one of Karachi's busiest hospitals was signed in 2012. Siemens was brought on board to facilitate its construction and the project has been completed after three years of dedicated effort. This new grid station also highlights KE's investment to meet the growing energy needs of its network and this would now increase KE's Grid Stations to 64.-PR

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Pakistan Oil, Gas & Energy Exhibition: over 250 exhibitors from over 25 countries may participate

The 13th International Exhibition for the Energy Industry-POGEE-2015 is scheduled from 23thApril to 25thApril, 2015, at Expo Centre, Karachi. The exhibition is geared up for an extensive display of technological advancement and innovative services and is expected to attract approximately Eight to Ten Thousand visitors from cities like Faisalabad, Sialkot, Gujranwala, Rawalpindi Islamabad, Peshawar, Hyderabad, Ghotki, Muzzafargarh, Shakohpura, Multan, Lahore and Karachi. More than 250, companies from around25, countries are participating in the show with a majority from, China, Germany, Italy, England, Russia, Canada, Denmark, Egypt, France, Hong Kong, Switzerland, Japan, Pakistan, U.A.E., U.K, U.S.A, Australia, South Korea, Spain, Poland, Singapore, Netherlands, Saudia, and Turkey. The exhibition provides an opportunity to bring together the international business professionals and the leading local industry players to exchange their technical and business expertise to acquaint the local industry with the latest developments in the energy sector.-PR

Copyright Business Recorder, 2015

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TGL's $119 million wind power venture achieves financial close

Tenaga Generasi Ltd, (TGL) a wholly-owned subsidiary of Dawood Lawrencepur Ltd, achieved the financial close of its 49.5MW wind power project recently. In a ceremony held in the office of Alternative Energy Development Board (AEDB) in Islamabad, the Chief Executive Officer (CEO) of Tenaga Generasi Ltd Inam-ur-Rahman and Chief Executive Officer of AEDB Asjad Imtiaz Ali signed the Financial Close documents. The project is located in Khutti Kun, Mirpur Sakro, Thatta, and will add a minimum of 135GWh of electricity each year into the national grid. The total project investment of $119 million is financed through local and foreign lenders that include: International Finance Corporation (IFC), Overseas Private Investment Corporation (OPIC), HBL and Soneri Bank Limited. The project is expected to commence its commercial operations in September 2016. The project will consist of 31 wind turbines from General Electric. The Project Company has entered into an EPC contract with China Machinery Engineering Corporation for the offshore scope (supply of imported equipment), and China East Resource Import and Export Corporation, for the onshore scope (in-country works of the project).-PR

Copyright Business Recorder, 2015

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Thar Coal machinery exempted from customs duty

The federal government has exempted coal mining equipment and machinery including vehicles used on site (not manufactured locally) and imported for Thar Coal field from payment of customs duty. The FBR has issued S.R.O. 268(I)/2015 here on Friday, in this regard. According to the notification, the FBR has exempted coal mining equipment and machinery including vehicles for site use, if not manufactured locally, imported for Thar Coal Field from whole of customs duty subject to the laid down conditions: Firstly, the exemption shall be available to those mining companies or their authorised operators or contractors who hold permits, licences, leases and who enter into agreements with the Government of Pakistan or any of the Provincial Government. Secondly, the goods shall not be sold or otherwise disposed of without prior permission/ approval of the Board and the payment of customs duties and sans taxes leviable at the time of import. These shall, however, be allowed to be transferred to other entitled mining companies with prior approval of the Board. Thirdly, the Chief Executive, or the person next in hierarchy duly authorised by the Chief Executive or Head of the importing company shall certify in the prescribed manner and format as per Annex-A that the imported items are the company''s bona fide requirement. He shall furnish all relevant information online to Pakistan Customs Computerised System against a specific user ID and password obtained under Section 155D of the Customs Act, 1969 (IV of 1969). In already computerised Collectorates or Customs stations where the Pakistan Customs Computerised System is not operational, the Director Reforms and Automaton or any other person authorised by the Collector in this behalf shall enter the requisite information in the Pakistan Customs Computerised System on daily basis, whereas entry of the data obtained from the customs stations, which have not yet been computerised shall be made on weekly basis. The importer would certify that the description and quantity mentioned above are commensurate with the project requirement and that the same are not manufactured locally. It would be further certified by the importer that the items shall not be used for any other purpose. In case of clearance by Pakistan Customs Computerised System, the requisite information shall be furnished on line against a specific user ID and password obtained under section 155D of the Customs Act, 1969, it added.

Copyright Business Recorder, 2015

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Renewable energy: annual report says global investments rebound strongly

Global investments in renewable energy rebounded strongly last year (2014), registering a solid 17 percent increase after two years of declines and brushing aside the challenge from sharply lower crude oil prices, said United Nation Environment Programme's ninth annual report 'Global Trends in Renewable Energy Investments'. The report, prepared by the Frankfurt School-UNEP Centre and Bloomberg New Energy Finance, says major expansion of solar installations in China and Japan and record investments in offshore wind projects in Europe helped propel global 2014 investments to $270 billion, a 17 percent surge from the 2013 figure of US $232 billion. "It was the first annual increase in dollars invested in and committed to renewable (excluding large hydro-electric projects) in three years, a total just three percent below the all-time record of $279 billion set in 2011. The falls in the investment figures for 2012 (to US $256 billion) and 2013 (to $232 billion) were attributed in part to lower prices for renewable energy technologies due to economies of scale," it observed. According to the report, the 103 gigawatts (GW) of generating capacity added around the world made 2014 the best year ever for newly installed capacity. A continuing sharp decline in technology cost, particularly in solar but also in wind, means that every dollar invested in renewable energy bought significantly more generating capacity in 2014. The 103 GW of capacity added by new renewable energy sources last year compares to 86 GW in 2013, 89 GW in 2012 and 81 GW in 2011. The 103 GW of capacity added by renewable last year equals the energy generating capacity of all 158 nuclear power plant reactors in the US. "Wind, solar, biomass and waste-to-power, geothermal, small hydro and marine power contributed an estimated 9.1 percent of world electricity generation in 2014, up from 8.5 percent in 2013. This meant that last year the world electricity system emitted 1.3 gigatonnes of CO2, roughly twice the emissions of the world's airline industry, less than it would have if that 9.1 percent had been produced by the same fossil-dominated mix generating the other 90.9 percent of world power," it revealed. The report observed that China saw by far the biggest renewable energy investments last year, a record $83.3 billion, up 39 percent from 2013. The US was second at $38.3 billion, up seven percent on the year (though this is below its all-time high reached in 2011). Japan was next at $35.7 billion, 10 percent higher than in 2013 and its biggest total ever. "As in previous years," said the report, "the market in 2014 was dominated by record investments in solar and wind, which accounted for 92 percent of overall investment in renewable power and fuels. Investment in solar jumped by 25 percent to $149.6 billion, the second highest figure ever, while wind investment increased by 11 percent to a record US $99.5 billion. In 2014, some 49GW of wind capacity and 46GW of solar PV capacity were added world-wide, both records." The report observed that although 2014 was a turnaround year for renewable after two years of shrinkage; multiple challenges remain in the form of policy uncertainty, structural issues in the electricity system, even in the very nature of wind and solar generation, with their dependence on breeze and sunlight. Another challenge it pointed out is the impact of the 50 percent-plus collapse in the oil price in the second half of last year. Of greater concern is the erosion of investor confidence caused by increasing uncertainty surrounding government support policies for renewable. "The previous year was a year of eye-catching steps forward for renewable energy with investment rallying strongly. If these positive investment trends are to continue it is increasingly clear that major electricity market reforms will be needed. The structural challenges needing to be overcome are not simple ones, but are of the sort that have only arisen because of the very success of renewable and their over two trillion dollars of investment mobilised since 2004," it added.

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Renewable energy 1,000MW likely to be added to system by year-end

Pakistan Council of Renewable Energy Technology (PCRET) Wednesday said that 1,000 MW of renewable energy would be added to the system by the end of current calendar year. Briefing the National Assembly Standing Committee on Science and Technology that met with Tariq Bashir Cheema in the chair, Dr Suhail Zaki Farooqui said that 300 MW wind power plant has already been installed while 3,000 MW is in the pipeline and would be added to the system in next 2-3 years. The DG said that Fauji Fertilizer Company Ltd and Zorlu Energji have operational wind farms of 106 MW. Two more companies are supplying additional 100 MW. Moreover, two more projects of 100 MW have achieved financial close. Another 1,130 MW power is expected to achieve financial close till August 2015. About 26 companies have been allotted land in the Gharo-Corridor for installation of new wind farms. He added that currently the total installed capacity in Pakistan stands at 21,000 MW; the actual demand is 18,000 MW while actual supply is 12,000 MW. Renewable energy potential in the country from different resources is as follows: Wind-120,000 MW, solar 2,900,000 MW, hydel 100,000 MW and biomass 5,700 MW. Pakistan could produce six times more energy than the present installed capacity, 150 times more could be produced from solar sources, five times more from hydel capacity and one fourth more from biomass, he added. Secretary Science and Technology Kamran Ali Qureshi said that 100 MW solar power plant at Bahawalpur will be inaugurated shortly. Pakistan is spending only 0.05 percent of the GDP on scientific research, which is lowest in the region, negatively affecting research and economic development of the country, he added. Qureshi alleged that the government is putting science and technology on low priority, as the budgetary allocation for the sector is continuously declining. Work on some projects stopped while others would be abandoned if allocations against new projects were not made in the upcoming budget under the head of Public Sector Development Program (PSDP). The number of PhD holders had declined from eight to two only including himself, he added. The PCRET official said that the Organisation will have no work/project after June 2015, if new proposed projects were not approved in the upcoming budget PSDP. The ministry demanded of the government to give incentives and subsidies to encourage investors and make solar energy consumption viable for consumers. The Committee strongly approved the demand of the Ministry of Science and Technology, recommended to the Planning Division for giving top priority to the sector. The committee endorsed the professional expertise of PCRET and observed that the organisation can contribute in the field of energy technologies subject to availability of adequate funds. To introduce new products in their respective field, the committee recommended that sufficient funds may be allocated for research and development of Organisation. To promote the solar energy technologies, the committee suggested that the Capital Development Authority (CDA) may be approached to examine the possibility of inclusion of solar panels in their by-laws for construction of new houses in Islamabad.

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