Prospects and Opportunities
Punjab has population of around 93 million and the largest industrial base making it the biggest consumer of electricity. Punjab contributes 60% to the GDP of Pakistan. There is a growing un-met demand of energy which offers an opportunity for investments in power generation projects based on various indigenous sources.
Punjab has a total low-head hydel potential of 600-1000 MW on canals and barrages.
Punjab has sizeable coal reserves, estimated at 235 million tons of varying quality. 16 Industrial Estates under Punjab Small Industries Corporation have been targeted for establishment of dedicated power plants (10-50 MW) using mix of coal, biomass and solid waste
Biomass, Bio-gas and Waste to Energy
Huge potential of biomass based power generation exists on un-utilized crop residue of around 34 million tons per annum consisting of rice husk, rice straw, maize stalk and cotton stick, etc.35 million livestock in Punjab offers substantial opportunity for bio-gas power projects. 12,300 tons/day of solid waste is produced in urban centers of Punjab which is a readily available source for generation of power.
Renewable Energy (Solar and Wind)
Huge potential for generation of power through solar energy especially in Southern Punjab that has one of the highest solar insulation in the world. Wind corridor in Northern Punjab, around 10-20 KM wide and 250 Km long, promises considerable potential for wind power projects.
Incentives & Legal Framework
Government of Punjab has developed an enabling Punjab Power Generation Policy to facilitate investment in this vital sector. Punjab Power Policy 2009 provides a framework for the development of power plants in both public and private sector as well for joint venture projects. The policy is intended to promote all types of technologies including hydel, coal, solar, wind and bio-mass. Hydel projects in the private sector can be implemented on Build-Own-Operate-Transfer (BOOT) basis while other projects in the private sector can be established on either BOOT basis or on Build-Own-Operate (BOO) basis.
Power generation companies are allowed:
- Import plants and equipment @ 5% Custom Duty with exemption on Sales Tax.
- Import plant and equipment @ 0% for renewable energy.
- Full repatriation of profit plus investment.
- International arbitration awards enforceable under law.
- Hydrological risk borne by the government.
- Minimum 15% ROE guaranteed net of taxes (US$ based).