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Govt likely to waive duty on equipment import

In a move that is likely to be welcomed by consumers and power producers alike the government is likely to waive off duties on import of parts of renewable energy plants in the upcoming budget in a bid to attract investment.

The proposal was discussed in a high level meeting chaired by Prime Minister Yousaf Raza Gilani to review Renewable Energy Development Projects here on Tuesday at the Prime Minister House.

At present, there is no import duty on complete renewable energy plants but investors have to pay duty if they import parts. The Alternative Energy Development Board (AEDB) has submitted proposals to the Ministry of Finance which will be examined and if approved will be announced in the budget in June. Sources told The Express Tribune that the prime minister directed Dr Abdul Hafeez Sheikh, Minister for Finance to examine the proposals.

During the meeting, it was also decided to launch the pilot project of bio-diesel by Pakistan State Oil (PSO) which will have the support of the AEDB and the government of Baluchistan.

“We have already seen the benefits of bio-diesel when a car powered by bio-diesel covered a distance of 40,000 kilometres in Pakistan,” a senior government official said, adding that the Economic Coordination Committee (ECC) has targeted the completion of the bio-diesel project by 2020, which will save Rs2 billion annually.

Sources also said that the prime minister had directed that AEDB be turned into a financially viable entity by forming a trust fund. The idea would be that AEDB will contribute to this fund by charging for services but the plan is still in its initial stage with many details yet to be finalised.

Meanwhile according to a statement Prime Minister Yousaf Raza Gilani said that the government has initiated a number of projects in the power sector to overcome the energy shortage in the country. He said that apart from hydel power generation, the country possessed enormous potential of power generation through other renewable energy resources of wind, solar, geo-thermal and biofuel energy. He said that wind energy could produce 350,000 MW, solar 2.9 million MW and geo-thermal 2,500 MW.

Arif Allaudin, Chief Operating Officer of the AEDB said that in view of the vast potential of renewable energy in Pakistan, they have so far received offers of private sector investment to generate 1,500 MW of electricity through these resources.

The CEO apprised the meeting that projects of 400 MW would start this year and the units would start generating electricity early next year.

He said that the project of 150 MW of wind Jhampir in the province of Sindh, is already under construction and would start operation during the first half of 2012.

The Waste to Energy sector projects are under various stages of development and will start production of electricity in the next two years.

The prime minister also said that villages that were located at a distance from the national grid will be proved solar electricity.

The prime minister also said that off-grid application like solar water heater, biogas and water pumping be implemented through renewable resources.

Published in The Express Tribune, March 7th, 2012.

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