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Sindh wants AEDB role in wind energy reduced

Sindh has sought to minimize the role of the federal government-run Alternative Energy Development Board (AEDB) in the wind energy sector in the province after the passage of 18th Amendment that made renewable energy a provincial subject, according to officials and documents obtained by Dawn on Sunday.

“We want that the AEDB should not compete with Sindh in the wind energy, instead its role should be supplementing and complementing the province in terms of provision of services to investors,” said Sindh Board of Investment (SBI) Chairman Mohammad Zubair Motiwala.

Official sources told Dawn that this issue and other host of issues also came under deliberations during a recent meeting about the wind energy sector in Sindh chaired by Sindh Chief Secretary Mohammed Ejaz Chaudhry held at Sindh Secretariat.

A senior official privy to the meeting said that Sindh had given 64,000 acres of land to the AEDB when the board was established in 2006 for wind energy projects.

He said after the devolution in 2009, this had become a provincial subject, but the AEDB continued to take charges/rent of the allotted land from the investors.

The SBI estimated that Sindh could generate up to Rs10 billion every year from wind energy through rent of its land, according to the papers.

Following the 18th Amendment, renewable energy is a provincial subject, thus, the Sindh government can issue LoI (Letter of Intent) to the investors for expeditious execution of projects. Under the 2006 renewable energy policy of the federal government, the LoI could be issued by the AEDB or provincial government or Azad Jammu and Kashmir, however, presently the LoI is being issued by the AEDB, which entails “a lengthy procedure for investors and delay in wind energy projects,” according to the SBI.

The board of investment proposed to the government that the role of the AEDB should be restricted to dealing with the National Electric Power Regulatory Authority (Nepra) and the National Transmission and Distribution Company (NTDC) on issues of upfront tariff and power evacuation or upgrade of grid, as the board is federal institution.

According to the SBI suggestion, the LoI should be issued by the Sindh government and for this purpose, a committee comprising officials of power and energy department and the SBI should be set up. The committee should also look after the issues of land availability and allotment. Besides, the proposed body should issue exemption letter for custom requirement to claim exemption for import of machinery and allied items. At preset, the sources said, the AEDB was issuing such exemption letter.

The SBI believed that if the proposed measures were adopted, the same would be “beneficial to investors and will help to expedite wind energy projects”.

Out of several proposed wind energy projects, so far, two projects namely of Fauji Foundation Pakistan and Zorlu Energy Pvt. Ltd, have started electricity production of 56 and 50 megawatts, respectively.

This electricity is being supplied to Hesco via 132KVA lines near the project site.

The SBI was of the considered view that the up-grade of grid was very much needed on a ‘war-footing basis’, otherwise, it apprehended that it would “slow down the process of power generation and negatively effect investment.”

The meeting chaired by the chief secretary also reviewed the issues of land allotment. It was pointed out that following the July 16 meeting, which was held at the CM House, the Board of Revenue issued ‘letters of comfort’ to two firms that “increased the confidence of investors”.

However, the SBI fearing that delay in land availability reports might have “negatively affected investors’ confidence” called for addressing the issue of land availability/allotment on a priority basis to facilitate further investment.

About progress on the wind energy projects, it was stated that the land had been allotted for 31 projects with capacity of over 1,947MWs.

Out of these projects, nine fast-track projects were expected to start production by December 2013, it was estimated. This way the authorities hoped that generation of around 800MWs wind energy would start by the end of June 2014.

Out of the 31 projects, the AEDB had initiated 16 wind energy projects in Jhampir, Thatta while the rest of projects were being initiated by the Sindh Board of Investment.

It was estimated that the Gharo-Keti Bandar wind corridor spreading over 60 kilometres along the coastline of the Sindh province and more than 170-km deep towards the land alone had a potential of around 60,000MWs. This wind corridor had been validated by a national laboratory of Denmark. However, as per the SBI briefing, the wind map developed by the National Renewable Energy Lab in the US in collaboration with the USAID had indicated a potential of 346,000MW wind energy in Pakistan.

Meanwhile, the chief secretary highlighting the importance of expediting the projects to overcome the energy crisis also sought a detailed progress report within seven days. He also called for the ‘activation of 18 firms’. He said the firms, which had been allotted the land, should start the projects in accordance with the provincial government policy.

He directed the officials concerned that a post of deputy director in the energy department should be created to assist the district administration of Thatta in administrative and technical issues.

The meeting was attended by SBI Director General Muhammad Riazuddin, Energy Secretary Wasif Abbas, Implementation Secretary Dr Riaz Ahmed Memon, Thatta Deputy Commissioner Agha Shahnawaz, Additional Secretary for Land Utilization Jalaluddin Maher, SBI Director Abrar Shaikh and representatives of the wind energy firms.

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