State Bank hits solar imports with fresh restrictions

New circular by SBP requires “prior permission” before opening import transaction of hundreds of items, including all solar equipment

KARACHI: It landed like a bombshell. On the 5th of July, the State Bank of Pakistan (SBP) updated its list of products for which “prior permission” will be required and LCs can be opened for their import. Among the products added to the list – solar panels, inverters, and batteries.  

The requirement had been in place since May 20, but this new circular expanded the coverage to all items under HS codes 84 and 85, which includes “nuclear reactors, boilers, machinery and mechanical appliances and parts thereof,” as well as “electrical machinery and equipment and parts thereof.” The latter category has netted solar panels, inverters and batteries among many other items. 

“The import of solar equipment has been slowed since no payment can be made without prior permission,” says Muhammad Farhan, ex Chairman of Pakistan Solar Association. One of the HS codes, among hundreds, on the list of items that now require prior permission of the SBP is HS8504.4090, under which all inverters are ordered, but that code also includes other items like emergency power supply equipment for hospitals, he adds.

“Tax on any equipment other than solar panels has not been zeroed,” he tells Profit, referring to the decision taken by the prime minister that excludes solar panels from the Sales Tax. “Why have solar on-grid inverters not been zeroed? They have no other purpose!”

What shocked players in Pakistan’s solar market was the timing of the announcement. The SBP circular including all their equipment in the list of items requiring prior permission was issued on July 5.  The very next day Prime Minister Shehbaz Sharif tweeted an announcement of a “solar package” that his government is preparing to ramp up adoption of solar initiatives across the country.

This is not the first time that providers of solar solutions have faced restrictions. On at least two occasions before this, the noose has been tightened around their necks, despite the fact that the country is facing daunting power shortages and spiraling cost of imported fuel. 

In April the State Bank required solar imports to post 100 percent cash margin on all LCs, placing a crushing burden on the cash flows of all businesses operating in this sector. That was then followed on May 20 by a circular requiring “prior permission” for import of solar inverters as mentioned earlier. And then we have the latest circular issued on July 5 that expanded the coverage to panels, batteries, solar lanterns, geysers and all other products.

“The government recently has taken a keen interest in solar energy and has pledged to expand renewable energy in the energy mix by 20% by 2025 and by 30% by 2030,” said Reon Energy in a statement sent to Profit magazine via email. 

On its website, Reon says it is the country’s largest company in the solar sector, providing large solar solutions to industry. They are currently engaged in the largest solar project in the industrial sector, for a cement plant in DI Khan, installing a project that will take the plant off natural gas forever once completed. The COD for that project is expected in November, but it has been hit by the new requirements.

“The premier also recently stated via his Twitter handle that the coalition government aims to introduce the country’s first comprehensive solar policy which will drastically cut fuel imports, bring down cost of electricity and provide clean energy,” the statement continues, highlighting the irony behind the timing of the announcement.

“On the contrary, the SBP lately imposed a regulatory bank approval requisite on inverters and batteries as per EPD Circular Letter as of May 20, 2022, and on solar panels, as per EPD Circular Letter dated July 5, 2022, to curb imports in accordance with the recent policy wide announcements.” 

49 COMMENTS

  1. The Govt must facilitate the solar energy sector to compete the electricity shortage, it seems the electrical shortage is deliberately created to facilitate the solar sector in order to give relief to the loved ones. In this scenario the small and medium installers affected very badly and a huge burden on the solar end users. This practice is unacceptable and every body has right to do the business independently. It must not in the hands of rich people having black money. No to black marketing.

    • This is a british colony every government actually work for the blody british queen.
      Why do british want this stupid people’s land called pakistan prospering comparing with those free Nations like India and Bangladesh.

      • Well said, .my dear…., but the Britain is no longer a key & major manipulator in this shit country & most other 3rd world countries, it’s mainly the Movers-n-Shakers of the American Society. 👍😤🥶🤠☠

        • Guys while we pump water, have own street guards, get our streets clean through private jamadars then why not generate our electricity? If state bank is giving any incentives or loans we must go for it. Does anyone know how to apply for loan ?
          I suggest go for 4 batteries and 5KVA Inverter with 1 KVA solar panels. You can ramp up the solar panels upto 5KVA as and when the pocket allows. I have moved to Solar energy in the same manner.
          Be practical. Its Useless to curse our govt., which is sazaa of our gunah. And 1 KVA panel is quite enough for a medium sized family of 5.

  2. With these restrictions
    People’s will get things in black
    So govt should give permission
    To people’s to import things by arranging
    Self doller also

  3. This is done so only Humza Shahbaz company thrives and all others sink. It’s not rocket science.

  4. The requirement had been in place since May 20, but this new circular expanded the coverage to all items under HS codes 84 and 85, which includes “nuclear reactors, boilers, machinery and mechanical appliances and parts thereof,” as well as “electrical machinery and equipment and parts thereof.” The latter category has netted solar panels, inverters and batteries among many other items.

  5. حکومت کو چاہئیے کہ سولر سسٹم کی مصنوعات تک رسائی کو مزید آسان بنایا جائے، نہ کہ مشکل۔ یہ بہت ضروری ہے آج کل کی ضروریات کے حساب سے۔

  6. Please don’t expect anything good from these thugs. They are brought just to bring Pakistan to knees. Everything bad is by design.

  7. حکومت اگر سولر سسٹم کی تنصیب آسان بنانے تو اگلے کئی سال ہم پٹرولیم مصنوعات کی مہنگی مصنوعات میں کمی ہو سکتی ہے ۔۔ زرمبادلہ بچایا جا سکے گا اور معیشت مستحکم ہو سکے گی

  8. ھم نے ٹیوب ویل لگوانا ھے حکومت کو چاہئے کہ جلدی کرے تاکہ اخراجات کم ھوں۔۔۔۔۔۔۔۔۔

  9. Solar system ki zarurat ni Bijli kidar geb ho gi a Imran Khan saab k dor men to thi aab kidar geb o gi hey ?

    • Kpk mai 1500+ cmpny bnd thy pti gov bijly provide nhi krti thi likn ab mehngai k waja say bnd hai aur agr open b hai tho …..

    • This is a british colony, every government actually work for the blody british queen.
      Why do british want this stupid people’s land called pakistan prospering. comparing with those free Nations like India and Bangladesh.

    • ہاں بڑی تھی تاروں میں سے ٹپک رہی ہوتی تھی۔۔۔۔۔ محترم ماہ رمضان سے میپکو نے لوڈ شیڈنگ شروع کردی تھی شاید آپکا نبر لیٹ لگا۔۔۔۔

  10. Solar …only way forward for sunny country like ours.govt you are thinking on right track but do it quick.give solor on installments through banks charge in stallment through Wanda monthly bills.dont charge interest rather GOP should contribute interest rate only.make 60 month plan .

  11. This is a british colony every government actually work for the blody british queen.
    Why do british want this stupid people’s land called pakistan prospering comparing with those free Nations like India and Bangladesh.

  12. Only the mafia can import no one else. SBP will allow opening of LCs for Sharif’s families. Artificial shortage of power after the imported Govt.

  13. اسلام علیکم ورحمتہ وبرکاتہ
    حکومت پاکستان کوئی ایسا طریقہ بنائے
    جس کے تحت پورے پاکستان میں سولر پینل اور سولر پینل میں استعمال ہونے والی بیٹری ڈیوٹی فری ہو
    اس پروگرام سے ملک پر جو بجلی مافیاز ہے
    اس سے قوم کی جان چھوٹ جائے گی
    اور جو قومی دولت ضایع ہو رہی ہے
    اس پروگرام کے تحت پورے ملک میں بجلی کی طلب میں کمی ہو جائے گی

    • بجلی مافیا بھی یہی ہیں اور سولر پینل کا کاروبار بھی سلمان شہباز کا ہے۔ مہنگے ایندھن کے معاہدے بھی انہوں نے ہی کئے ہیں تو باقی کہانی سمجھنا قطعی مشکل نہیں ہونا چاہئے

  14. In a year 100% increase the price on local shops, now solar plate price is 13000/= after the imported tax what price will be adjust for people, no electricity, in the country only solar energy save the life, so now it is more expensive a bed decision of PM and state bank of Pakistan.

    • Well said, .my dear…., but the Britain is no longer a key & major manipulator in this shit country & most other 3rd world countries, it’s mainly the Movers-n-Shakers of the American Society. 👍😤🥶🤠☠,

  15. Govt should bound the banks to provide loan repable in installation for solar system duly inssured as well as PG of owners. This is the only solution to encourage the people to avail the opportunity.

  16. Availability of solar panels on cheaper rats in the market would certainly have a long lasting effect on agriculture , electricity and some relief for poor people to have a fan in this hot summer.

  17. we want to install in my house 5 KVA. I have three hundred thousand. we want to install on instalment. So Govt. gave us help.

  18. local manufacturing is keyword, solutions cannot be imported, Pakistan must manufacture local solar panel and allied electronics electrical devices and must be able to provide the best quality for the right price

  19. PTI govt has given too much leeway to the SBP. Such decisions are in the purview of the Govt. SBP should keep out of it. Decreasing the fiscal burden of fuel imports is a must for Pakistan’s economy and a major step towards long term elimination of CAD. The IMF controlled SBP is an abomination. Pakistan must recover its economic feasibility and get out of cluthes of the IMF once for all.
    Two best ways to to fiscal independence are reducing dependence on imported fuels drastically and increased agri output including edible oils.

    • آپ نے درست فرمایا
      پہلے ھی عدلیہ نے انتظامیہ کا کام سنمبھال رکھا ھے رھی سہی کثر اسٹیٹ بینک نے پوری کر دی ھے
      ھر صورت اسٹیٹ بینک کے اختیارات کو محدود کر کے یہودی ایجنڈا ناکام کرنا ھو گا

  20. Only PM’s son can import solar only. These restrictions are made for business people so ultimate beneficiary for solar business will remained Sharif family. White collar crime.

  21. IK govt sold the stat bank allowing such attonomy to work against pakistan govt and public lik that of East India co. Governor stat bank was imported by ik and such laws were imposed by ik that no court can control stat bank Even if he sells pakistan

  22. The nation is in great trouble in the hands of looters since 1952. There is no any sincere honest quaid leader to overcome this emberassing situation in our beloved country and save the poor nation from dishonest people. Allah se tobha o astghfar Karen.

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