ISLAMABAD: The long-awaited 300 MW Floating Solar Photovoltaic (FPV) project at Ghazi Barotha, funded by the World Bank, remains uncertain. The project, which aims to establish 150 MW solar capacity each at the Ghazi Barrage Head Pond and Barotha North Pond, has faced opposition from the Minister for Power, who raised concerns about the high cost of financing, sources told Newzshez.
According to sources, a meeting was held at the Prime Minister’s House in Islamabad on November 28, 2024, to discuss the status of the project, the readiness of the Ministry of Water Resources, and its inclusion in the Indicative Generation Capacity Expansion Plan (IGCEP). The meeting was chaired by the Minister for Economic Affairs, Ahad Cheema.
Secretary of the Economic Affairs Division (EAD) informed attendees that a formal request had been received from the Ministry of Water Resources to approach the World Bank for financing support for the project. The request for funding would be submitted once the project’s inclusion in the IGCEP was confirmed.
The Chairman of WAPDA presented an overview of the proposed project, which would involve the installation of 150 MW solar capacity each at the Ghazi Barrage Head Pond and Barotha North Pond. The estimated cost of the project is $287.75 million, which includes WAPDA’s equity of $5 million. Since existing 220kV transmission lines are already in place at both sites, no additional cost would be incurred for transmission infrastructure.
Additionally, the project is expected to help with water management by facilitating the pumping of water from the lower reservoir to the upper reservoir, improving water storage capacity. WAPDA also provided a comparative analysis of the energy costs under different financing structures:
He informed that as per estimates, calculation of tariff under different modes of financing, had emerged as follows: (i) 100 IBRD Cents 4.06 per unit, ;(ii) 50 % IDA/50% IBRD, Cents 3.98 per unit ;(iii) 75% IDA/25% IBRD Cents 3.90 per unit ;(iv) 100% IDA Cents 3.80 per unit ; and (v) 50% IDA/50% IDA SML, Cents 3.39 per unit.
The Secretary EAD clarified that IDA funding availability was mostly exhausted and project financing would likely be through IBRD loan.
The Minister for Power, Sardar Awais Leghari informed that according to the Council of Common Interests (CCI) and requirement of policy and prevailing law, Government was required to opt for least-cost methodology to add power to the country’s system. The possibility of inclusion of proposed floating solar project and the time frames involved in respect of bringing online other priority projects including Diamer Basha Dam would impact the calculations in IGCEP. He shared that opting for a specific project violating the least cost methodology was not advisable. He maintained that the IGCEP methodology was comprehensive and took into account an extensive number of factors to evaluate and select projects based on least cost methodology. He asked for 10 to 15 days for its least cost determination and clearance through IGCEP system.
The Minister for Water Resources opined that basic economic principles supported the consideration of any new project if its full cost was less than variable costs. He also highlighted that leveraging more solar energy would lead to reduction in import of fuel required for energy generation. He, however, agreed to wait for the formal results/determination of IGCEP.
Country Director (World Bank) informed that the project had been in the preparation phase for last three-four years and the Country Management Unit was under immense pressure to either move forward or cancel the project. However, on intervention of the Minister for Economic Affairs he agreed to wait for 10 days to facilitate final decision of Government.
After detailed deliberations, the following decisions were made: (i) Power Division to run the project through IGCEP system to determine its feasibility as a least cost candidate project and convey the final outcome (regarding inclusion in IGCEP or otherwise) to Ministry of Water Resources as well as MOEA by December 19, 2024 ; and (ii) EAD would apprise the World Bank of the Government’s decision based on the Power Division’s stance in view of determination of tariff and results of IGCEP simulation. Ends
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