First ever renewable energy policy unveiled
By Ali Imran

ISLAMABAD—Federal Minister for Water and Power Liaquat Ali Jatoi on Monday formally launched the first ever “Policy for Development of Renewable Energy for Power Generation 2006”, which envisages mainstreaming renewable energy employing small hydro, wind and solar technologies in the development plans of the country.
Mr Jatoi while briefing media on a policy approved by the Economics Coordination Committee of the Cabinet said that the policy lays down very liberal and attractive incentives to attract investment to put Pakistan on the Renewable Energy map of the world. Pakistan is blessed with abundance of renewable energy potential but so far its potential has not been harnessed except for large hydro electric projects, he added.
He said that the government has decided to use all other options to generate electricity to meet the growing demand of 10 to 12 % annually in the country. The policy is in line with the president’s and Prime minister’s open arm policy for inviting the investment in the country. He added that it will go a long way in strengthening and improving power supply position of the country.
He said that the policy comprises of three phases, short term, medium term and long term. Short term cover the period up to June 2008. Giving the salient features of policy, he said that it invites investment from Private Sector for four categories (a) Independent power projects (IPPs) (for supply of Power to grid only) (b) Captive cum grid spillover power projects (i.e self-use and sale to utility) (c) Captive power projects (i.e self of dedicated use) and (d) isolated grid power projects (i.e small stand-alone). To encourage generation through renewable resources, small projects for self use will not require any permission from the government and will also be able to sell surplus power to DISCOS under the policy. NTDC and Central Power Purchase Agency will purchase all electricity from Renewable Energy Resources projects.
The policy will allow an investor to avail the facility of delivering power on the existing infrastructure and receiving equivalent power for use at location of its own choice after paying wheeling charges etc. The small renewable energy projects will not require tariff determination from NEPRA. It has been allowed that Wind and Solar projects irrespective of size of plants (even more than 50 MW) will be dealt by AEDB. The power purchaser will bear the wind risk as well.
Giving the details of the financial incentives to the investors, he said that among other incentives it is also allowed that no custom duty or sale tax for machinery equipment and spares meant for the initial installation or for BMR or expansion after commissioning of projects for power generation utilization renewable energy resources. Exemption has been allowed from income tax, including turnover rate tax and withholding tax on imports of machinery and equipments. The launching ceremony was attended by Secretary and Advisor of the Ministry chairman AEDB, chairman WAPDA, Secretary AEDB and senior officials of the Ministry.