June 20, 2016

Pakistan: Sindh Government Earmarks Rs 6.35 Billion for Energy Growth

The Sindh government has earmarked Rs 6.35 billion in the fiscal budget 2016-17 for energy growth with various initiatives of renewable and non-renewable sources. "The ADP for energy department is pitched at Rs 6.35 billion for FY 2016-17. With these funds, the Energy Department has taken various initiatives to increase the energy output through renewable and non-renewable energy sources," Sindh Finance Minister, Syed Murad Ali Shah told the Sindh Assembly during his budget speech.

"Make Pakistan a self-sufficient country in energy, Sindh is playing its due role by attracting new investments through a variety of fiscal and monetary incentives," he said, adding the government had framed the Sindh Power Policy aimed at attracting private sector investment.

"Only strategic projects will be developed in the public sector in case of no interest and initiative from the private sector. To further this objective, lucrative and investor friendly Renewable Energy Policy, dedicated Land grant Policy 2015 and one window facility for investors has been put in place," he said. He said Rs 25 billion had been allocated for clearance of outstanding liabilities of electricity dues of various government departments pertaining to DISCOs such as KE, HESCO and SEPCO. "One of the greatest news of the current financial year is achievement of financial close for Sindh Engro Coal Mining Companies' joint venture project at Thar Block-II," he said.

The Sindh government holds 54 percent share in this company and has committed Rs 11 billion as its equity share. "Further, the Government of Sindh gave primary obligation to the Federal Government for Sovereign Guarantee of $700 million for the Thar Block-II Mining Project and has committed Rs 70 billion to build required infrastructure," Murad said.

He said initially it will be of a 3.8 million tons per annum coal mine, which would generate 660 megawatts power through a mine mouth power plant being installed by Engro Corp. "The project will start power generation in 2018. The capacity of mine will further scaled up to 7.4 million tons per annum with power generation of 1320 MW," he said.

"This is a landmark achievement and will pave the way for energy security of this country. The project is part of CPEC. Physical work has started and about 3 million BCM overburden has been removed," he said, adding that promoting the Renewable Energy (RE) projects, the Sindh government had evolved a dedicated Land Grant Policy 2015 for the purpose of developing the RE projects in the province.

"53,000 acres land has already been leased out to renewable energy projects, whereas 40,000 acres land has been reserved for Renewable Energy Parks in the province. Renewable Energy Enclave (REEs) have also been envisaged for allocation of government land with infrastructure for development of the RE clusters at strategic locations in the province," he said.

The Sindh government also aimed at achieving an increased economic activity by promoting distributed generation of electricity to catalyze economic activity in far flung areas of the province, he told the provincial legislature. The government has so far completed six wind power projects with a cumulative capacity of 309.2 MW. Nine wind power projects are under construction with a total installed capacity of 475.9MW. 46 and more wind projects with capacity of 3550MW are at various stages of project development. Total investment of wind power projects is approx $5370 million, he said. "The National Transmission & Dispatch Company (NTDC) has confirmed the power evacuation of 1756MW from this wind corridor. The wind tower manufacturing facilities by the Chinese Three Gorges Company is already operational in the Site area," he added.

He said the government had also planned 24 solar power projects, which will add 1450MW to the national grid. A total investment of solar power projects is $2900 million approximately, he added. "The Government of Sindh has issued Letter of Interest to a private firm for construction of 9MW and 15MW power generation facilities at Rohri Canal and Nara Canal downstream. Power generation from these two projects is expected by 2017," he said.

Two special purpose companies namely Sindh Nooriabad Power Company (Pvt) Limited Phase-I and Sindh Nooriabad Power Company (Pvt) Limited Phase-II have been established in PPP mode, with a lead partner Technomen Kinetics Pvt, Limited for installation of 2x50 MW gas power generation facility. It was in very advance stage and commissioning is expected by end of July, he said.

The Government of Sindh initiated a project for generation of 20 MW based on Municipal Solid waste and Agro waste as per international practice, in Khairpur District. The bidding process was near finalisation. The project was to been executed in PPP mode, Murad said.

About 750 villages had been solar electrified at a cost of Rs 1.2 billion by Directorate of village electrification during the last financial year and an amount of Rs 1.2 billion was allocated for the current financial year, he said. The Finance Minister said the government was executing supply of gas to villages through Sui Southern Gas Company Limited (SSGCL). A loan of Rs 6.5 billion has been disbursed to the SSGCL for carrying out gas supply to villages. SSGCL had completed supply of gas to 746 villages while work for supply of gas to 209 villages was in progress, he said.

"The Government of Sindh has also established "Sindh Transmission and Dispatch Company (STDC)". Currently, the STDC is constructing a power dispatch line of 90km from SNGPL up to KDA Scheme 33 Grid Station Karachi. K-Electric has sent Letter of Interest for getting 100MW power through the suggested transmission line. National Electric Power Regulatory Authority (NEPRA) granted its Special Purpose Transmission License (SPTL) to STDC on December 17, 2015 for the transmission line project," he said.

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