Solar Projects
Private sector investors, including M/s Atlas Power, Gul Ahmed Energy Group, and Metro Power Group of Companies, have urged the government to extend the deadline for bidding on solar power projects in Muzaffargarh by two months after the February 8 general elections.
This recommendation comes in response to Development Financial Institutions (DFIs) deciding to hold back on the clean energy project due to “uncertainty and lower credit rating of the country,” as reported by Business Recorder.
The government initially abandoned international competitive bidding after none of the 12 parties submitted bids, citing issues with the benchmark tariff. In April 2023, the government invited bidding via the Private Power and Infrastructure Board, seeking a levelled tariff for 25 years on a BOOT (Build, Operate, Own, and Transfer) basis. After resolving tariff-related concerns, the government relaunched the project, but only 11 parties purchased the bidding document.
DFIs such as IFC, BII, ADB, and FMO showed little interest in financing the project due to the country’s lower credit rating and prevailing uncertainty.
Maqsood Ahmad Basra, in a letter, expressed concern that a second failure would significantly impact achieving the target of cheap and clean energy. In light of the current situation, the private sector investors have requested the Private Power and Infrastructure Board to extend the bidding deadline by two months beyond the general elections.
This plea reflects the private sector’s concerns about the challenges in attracting investment and financing for renewable energy projects in Pakistan, underscoring the importance of addressing issues related to credit ratings and uncertainty to advance the country’s clean energy goals.
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