World Bank likely to give $200m loan for renewable energy project

The World Bank has initiated the process to approve a load of $200m for increasing the installed generation capacity of renewable energy and enhance its development in Pakistan.

The project will also receive a loan of $100m from the Green Climate Fund and will cost $300m

The proposed project will be implemented by Sindh Department of Energy in association with the Ministry of Water and Power and Water and Power Development Autho­rity (Wapda) and is being designed to demonstrate that solar photovoltaic (PV) technology can operate in conjunction with hydropower and wind-based power generation.

According to the project document, the major funding of $260m will be spent on a series of grid-connected sub-projects, all of which will add to the PV capacity, and may include investments in related infrastructure for evacuation or system dispatch.

The World Bank and the Asian Infrastructure Investment Bank (AIIB) are engaged with the expansion of Tarbela hydropower facility operated by Wapda. Tarbela currently has a built capacity of 3478MW which will be increased to 6298MW under the Tarbela Additional Financing Project.

Land availability and evacuation constraints are two key barriers to the smooth execution of solar PV projects — both of which are available at the Tarbela site. This project would, therefore, seek to build at least 100MW of land-based, grid-connected solar PV capacity.

The evacuation of solar power will be through the same transmission lines that are in operation for the hydroelectric plant.

The document states that Wapda has expressed an interest in owning and operating a blend of “green” hydro-plus-solar energy, according to media sources.

The second component of the project relates to Sindh solar PV demonstration power plant along wind corridor.

This sub-component of the project will finance one or more ground mounted solar PV power plants cumulatively sized at about 50MW. The power plants will be located on the land near transmission evacuation infrastructure and in Pakistan’s best wind resource corridor.

The Sindh government will use established special purpose vehicles (SPVs) for the realisation of these investments.

In addition, this component will finance grid extension and enhancements to evacuate power to the nearest grid station.

At a maximum cost of about $1.5 per watt, the total cost of this component is estimated at about $75m.

If the realised costs for the project are lower, the savings will be either reallocated to enhance other project components or to increase the size of the demonstration plant itself.

A component of the project will finance grid-connected, distributed, solar PV systems for small publicly owned land parcels, public sector buildings including schools, hospitals, water pumping and purification stations and other office buildings in Karachi and Hyderabad.

The Sindh government would establish an appropriate SPV for the implementation of this component.

The solar PV system will compromise photovoltaic panels and the balance of plant. The system will be connected to the nearby grid under National Electric and Power Regulatory Authority’s net-metering policy.

Another component of the project would finance off-grid solar PV technologies, especially suitable where loads are too small to justify large transmission and distribution expansion.

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