ISLAMABAD: In a significant but divided decision, the National Electric Power Regulatory Authority (NEPRA) has modified its regulations to exempt renewable energy projects to be established by foreign countries under the Inter-Governmental Commercial Transactions (IGCT) Act, 2022, as well as those projects which qualified as least cost committed in the Integrated Generation Capacity Expansion Plan (IGCEP) 2021.
Sources told Newzshewz that some members of the Authority strongly objected to the exemption for IGCEP 2021 projects as there is an impression that likeminded Members support each other on their favourite projects or those which are being pushed from some quarters.
According to sources, the decision was split, as the amendments have been approved by a majority vote by three i.e. Chairman Waseem Mukhtar, Member (Law) Amina Ahmed, and Member (Khyber Pakhtunkhwa) Maqsood Anwar Khan. On the other hand, Member (Finance and Tariff) Mathar Niaz Rana and Member (Technical) Rafique Ahmad Shaikh, representing Sindh, opposed facilitation of old projects.
Currently, Task Force on Energy, headed by the Power Minister, is giving final touches to revised pacts with 17 IPPs established under 1994 and 2002 Policies. The role of NEPRA in granting higher tariffs to power projects, is the key factor behind making huge profits.
The sources further mentioned that the government and Saudi company ACWA are close to finalizing an agreement to set up a 600 MWp solar power project at Kot Addu under the IGCT framework. The Saudi side has requested written confirmation to avoid any misunderstandings for investors. In addition, discussions are ongoing with Chinese companies about launching projects under the IGCT.
The draft Memorandum of Understanding (MoU) provided by the Saudi side has been reviewed by the Pakistani authorities, and the revised draft, which has been vetted by the Law Division, has been shared with the relevant stakeholders. Regarding the incentives requested by ACWA Power, the Private Power and Infrastructure Board (PPIB) has already responded to their queries, and the updated information has been sent to both ACWA Power and the Pakistan Embassy in Saudi Arabia.
PPIB also stated that the IGCEP 2024 is currently being finalized. The development of large-scale solar PV projects under the MoU will depend on the capacity available in the approved IGCEP and the economic feasibility of these projects.
Under the IGCT Act, a Government-to-Government (G2G) agreement or MoU, which outlines the key parameters and mechanisms for the proposed commercial transactions, will be negotiated and finalized between the designated entities of the Government of Pakistan (GoP) and the foreign government.
The GoP guarantee is part of the Implementation Agreement (IA) shared with the Saudi side. The IA is an umbrella concession agreement that is signed by the sovereign and ensures that all contractual obligations of public sector entities at the federal and provincial levels are met. It also establishes the obligations of the seller/investor to design, finance, engineer, construct, test, and commission the project. At the end of the agreement, the complex will be transferred according to the project terms.
Another key change to the NEPRA regulations concerns projects approved under the IGCEP 2021. The Authority was facing a technical issue because some projects, such as those under the administrative oversight of the Peshawar Electric Supply Company (PEDO), had encountered delays. While some of these projects are 50% complete, others, like the Gorkin-Matiltan Hydropower Project (GMHPP), are nearing completion.
“The Authority has exempted those projects that were committed under the IGCEP 2021 from amendments in NEPRA Act, inacted in 2022 . Approximately eight committed projects of 500 MW under IGCEP 2021 will benefit from this amendment,” said an insider.
The complete decision of the Authority was not available which was necessary to know the dissenting notes of opposing Members of the Authority .
In accordance with S.R.O 2720 (I)/2024, the following changes are made to the National Electric Power Regulatory Authority (Electric Power Procurement) Regulations, 2022:
Regulation 1, sub-regulation (3) now reads: “These regulations shall not apply to the procurement of electric power governed by the National Electric Power Regulatory Authority (Alternative & Renewable Energy) Distributed Generation and Net Metering Regulations, 2015, or to electric power procurement processed and approved under the Inter-Governmental Commercial Transactions Act, 2022 (Act No. XXX of 2022).”
In Regulation 8, sub-regulation (1)(f), the word “and” is removed in Explanation (a).
In Regulation 8, sub-regulation (1)(f), in Explanation (b), a full stop is replaced with a semicolon, and the word “and” is added.
In Regulation 8, sub-regulation (1)(f), after Explanation (b), the following text is added: “(c) committed projects approved under the IGCEP prior to the enactment of these regulations.”
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