INVESTMENT OPPORTUNITIES IN

POWER SECTOR OF PAKISTAN

 Sequence

ENERGY MIX OF PAKISTAN

DEMAND-SUPPLY SCENARIO OF PAKISTAN

POLICY INCENTIVES FOR IPPs

POWER PLANTS

TRANSMISSION LINES

POLICY INCENTIVE FOR RENEWABLE ENERGY

SPECIFIC PROJECT OPTIONS

 OVERVIEW OF PAKISTANS POWER SECTOR
At present the following entities are responsible for delivery of power to the end
consumers:
One Transmission and Dispatch Company (NTDCL)
Ten Distribution Companies (DISCOs)
Four Public Sector Generation Companies (GENCOs)
Thirty One (31) IPPs
The Electricity Generation is blend of Hydel and Thermal Units.
Total installed capacity is around 25,000 MW with 53% and 47% Share of Public
and Private Sector respectively.
Currently Country is facing deficit of around 6,000 MW in peak summer months
whereas the power demand has been growing by 6-7% per annum resulting into
load shedding of 8-16 hours.
Expansion in Transmission Network is required to evacuate power from
upcoming projects.
Due to Financial Constraints in the Public Sector, the GOP is focusing on private
sector to invest in PPS to bridge the electricity demand supply gap.

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 PAKISTAN ENERGY MIX

Wind;
4%1%
Nuclear;
LNG; 3% Wind; 4% Solar;
Nuclear; 2%
3% Import; 2%
Hydel; 31%
Coal Imported; Hydel;
20% 26%
Oil; 39% Coal Local; 3%
LNG; 13% Gas; 12%
Gas; 22% Oil; 14%

Current Fuel Mix Fuel Mix 2019-20

 Power Demand and Supply
30803
27094 28168
26905
25145 25077
23107 23500
23434 22940 28788
20213 21068
19690
17582 17285 17582 18402
14174
12140

3250 4009
1811 1949 1263 2015

-3408
42370 -5822
-5442 42522 42736 42917 43101 43252 43466 43617 43831 43983

Peak Demand Available Generation

Gap
 PAKISTAN POWER SECTOR
CURRENT SCENARIO

In the peak summer months, electricity demand-supply gap reaches

up to 6,000 MW resulting in load-shedding of up to 8-16 hours per
day
Even if the maximum capability of 18,477 MW is assumed, country
would need additional 13,310 MW (net) by the year 2020, requiring an
investment of $15 billion
The government is looking towards private sector to bring additional
generation on coal, hydro and renewable energy on fast track basis
In order to encourage private sector, the government has been
issuing various policies/ guidelines from time to time in the past at
both federal and provincial levels

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 PLANS TO ENHANCE POWER GENERATION
CAPACITY AND ALLIED INFRASTRUCTURE

The Present Government is striving hard to overcome the ongoing power

crisis which has adversely impacted the National Economy.

A number of initiatives are in progress to enhance generation capacity of the

system, including power plants based on coal, hydel, gas and renewable
resources, both in public as well as private sector.

The GoP has recently approved Power Generation Policy 2015 which
provides attractive incentives for private investors

Extensive networks of high voltage transmission lines and grid stations are
being developed to evacuate power from upcoming mega coal and hydel
projects to be located southern and northern part of country.

The GoP has approved Private Transmission Line Policy for allocating
private investment in high voltage transmission lines

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 POWER GENERATION POLICY 2015
SALIENT FEATURES/ INCENTIVES

PPIB /relevant entities in the Provinces / AJK / GB will provide a one-

window facility for implementation of projects under the Policy.

Exemption from Corporate Income Tax, Turnover Tax, Withholding Tax and
Sales Tax, only 5% concessionary Import Duty on plant & equipment not
manufactured locally

GOP Guarantees obligations of power purchaser & provinces

GOP provides protection against Political Force Majeure, Change in Law

and Change in Duties & Taxes

For Hydro Power Projects; WUC will be paid @ Rs. 0.425/kWh to the
province where the project is located.

Power Purchaser to bear Hydrological Risk for Hydro projects

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 POWER GENERATION POLICY 2015
SALIENT FEATURES / INCENTIVES

Attractive ROE provided by the Regulator Imported Coal: 27.3 ; Local

Coal: 29.5; Thar Coal: 34.5; Hydro: 23% ROE ; Gas/LNG: 18% ROE

To mitigate high underground geological risk, long construction period

and environmental sensitivities following tariff re-openers are provided
by NEPRA
Cost Escalation in Civil and Cost Variation for E&M works
Resettlement Cost
Cost variation due to Geological Conditions limited to Tunnel Area

Tariff indexation for inflation (US CPI & Pak WPI)

Government ensures conversion of Pak Rupee & remittance of foreign

exchange for project-related payments

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 INVESTMENT INITIATIVES
(Coal based Power Projects)
At present, various local and imported coal based IPPs are under
process with PPIB, most of which are being developed under the
China Pakistan Economic Corridor (CPEC)
PPIB, after consultation with the stakeholders, has finalized and
shared Security Package Documents with the Sponsors
(Implementation and Power Purchase Agreements)
Moreover, the total potential of Thar is estimated at 175 billion tons of
lignite coal which may be sufficient to produce 100,000 MW electricity
for 200 years
NPERA has already announced Upfront Tariff for Indigenous Coal
based Projects
Investors are encouraged to participate as equity partner with existing
Sponsors in development of power projects based on Thar Coal and/
or propose new projects based on Thar Coal.

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 INVESTMENT INITIATIVES
(Transmission Line Projects)
Transmission Line and Allied Infrastructure Projects under the
proposed Transmission Line Policy (to be announced shortly)
List of Transmission System projects to be offered to Private
Sector will be prepared by GOP
Award of Projects through ICB and Upfront Tariff on BOOT basis
Policy to cover Transmission Line & Grid Station projects of 220
kV voltage level and above (EHVAC & HVDC)
Land & Legal Right of way to be provided by NTDC
Project Term: 25 years
Transmission utility (NTDC) to pay a fixed Transmission Service
Charge, regardless of the quantum of energy transmitted
Exemption from Corporate Income Tax for first ten years including
turnover rate tax and withholding tax on imports
Standardized Security Package (IA & TSA)
One Window facility by PPIB

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 NEW INVESTMENT INITIATIVES
(RLNG Projects)

3,600 (3 x 1200) MW Power Generation Projects based on R-LNG, to be

commissioned 2400 MW open cycle by May 2017; completion of 3600
MW early 2018
Tendering for all plants has been completed and contractors have
mobilized
02 projects being developed by Federal government while 01 by
government of Punjab
Equity participation in these plants is available for Russian investors
02 similar projects have been initiated at Jamshoro (600 MW) and
Guddu (1200 MW)
These 02 plants can be implemented on G-to-G basis with Russian
companies

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 Renewable Energy Policy 2006

No customs duty or sales tax on import of equipment

No Income Tax / withholding tax / turnover tax

Repatriation of Equity along with dividends freely allowed

Convertibility of PKR into USD

Non-Muslims and non-residents exempted from payment of

Zakat on dividends

Mandatory purchase of electricity by power purchaser

17-18% ROE

Governments Sovereign Guarantee

Grid evacuation responsibility of power purchaser

 Renewable Energy Projects

Wind Energy
Five (05) wind power projects of 255.4 MW operational.
Nine (09) wind power projects of 477 MW are under construction.
14 wind projects of 664 MW in different stages of development.

Solar Energy
One (01) solar project of 100 MW installed.
Three (03) solar projects of 300 MW under construction.
31 solar projects of 711.44 MW in different stages of development.

Biomass Energy
Three (03) biomass cogeneration projects of 82.7 MW operational.
Eleven (11) biomass cogeneration projects of 333.4 MW in development
stages.
 Renewable Energy Potential

Wind: 340,000 MW (Theoretical)*

1396 MW in pipeline
Solar: 2,900,000 MW (Theoretical)*
Hydro (small/mini) 3,000 MW (Approx.)
Bagasse Cogen: 2,000 MW (Approx.)
Waste to Energy: 1,000 MW (Approx.)
Geothermal Potential yet to be determined
Alternative Fuels Potential being determined

Initial macro level resource maps for wind and solar developed by NREL
(USA).
Resource mapping and spatial planning of solar , wind and biomass
energy resources has been initiated with the support of the World Bank
and ESMAPs Renewable Energy Resource Mapping Initiative.
* Based on NREL study conducted in 2006.
GEOTHERMAL SPRINGS Geothermal spring
Near the snout of Pechus
Budelas
Geothermal springs
OF PAKISTAN Glacier T: 36 - 46C

... ... .
Murtazabad
Geothermal springs
Yasin District
Seismo-Tectonic & Suture Related Systems T: 26 - 92C
Hot Sulphourus spring
Geopressurised Geothermal Systems
Geothermal springs located Dassu area Skardu district
Neogene-Quaternary volcanism related Systems Geothermal springs
Within Reshun and Ayun
fault domain T: max: 71 C

Mushkin geothermal spring

.
Geothermal springs at the north
T: 57 C
of Zhob valley

...
Tatta Pani geothermal spring
Geothermal springs at
T: 65,5 - 83 C
Harnai valley

. .
Giandari Hot Spot Bakkur thermal spring

. .
Taunsa thermal spring
Geothermal springs at

. .
West of Dhadar, near Sanni Zinda Pir thermal spring

Koh-e Sultan thermal springs Uch thermal spring

T: 25,6 34,8 C
Garm ab thermal spring

Kharan region (potential)

geothermal system . . . .. Khashkeli thermal gradient
3-3,5 C/100 m

Mangho Pir geothermal spring

T: 50,3 C

Karsaz geothermal spring

Lakhra thermal gradientTalhar thermal gradient T: 39 C
3,3 C/100 m 3-3,5 C/100 m
 Hydel Power Potential

Project Under Study

Diamir Basha Dam Project (4500 MW)

Patan Hydropower Project (2300 MW)

Thakot Hydropower Project (4000 MW)

Future Projects

Yulbo Hydropower Project (2800 MW)

Tangus Hydropower Project (2200 MW)

Skardu Hydropower Project (1200 MW)

 Coal Potential of Pakistan

Sindh
186 billion tons
Punjab
235 million tons

Balochistan
217 million tons

KP
90 million tons

Azad Kashmir Thar

9 million tons

Thar Desert contains the worlds 7th largest coal

reserves:
175 Billion Ton = 50 Billion TOE = 2000 TCF
Total Thar Coal Reserve More than Saudi Arabia 68 times higher than
& Iranian Oil Reserves Pakistans total gas reserves
 Fiscal Incentives for Coal Projects

Thar Coalfield is declared as Special Economic Zone, and projects

of development of Thar declared as Projects of National Security

20% ($ Based) IRR to firms which achieve Financial Close before

Dec 2015 for Mine & Power Plants based on indigenous coal.

Zero percent customs duties on import of coal mining equipment

and machinery including vehicles for site use.

Exemption on withholding tax on dividend for initial 30 years.

Exemption on withholding tax on procurement of goods and

services during project construction and operations.

Exemption for 30 years on other levies including special excise

20
duty, federal excise duty, WPPF and WWF.
 Power evacuation from 1320 MW Hubco Project

500 kV Double Circuit Transmission Line from Hubco

Coal Power Plant to Matiari (200km).
Scope of
Work
Extension at 500 kV Matiari Switching Station (Two
line bays with Shunt Reactor Banks)
Estimated
134MUS$
EPC Cost
Expected
Commissioni
December 2017
ng of Power
Plant
Financing Financing will be done through IFIs
PC-I PC-I submitted to MoW&P on 08.07.2015 and is under
Approval process with Planning Commission for approval of
Status ECNEC
Completion 2017-18
 Power Evacuation from Thar Power Plants

+ 600 kV Bi-Polar HVDC T/L from Thar to Lahore

(960km)
Scope of
HVDC Converter & Switching /Control Stations at
Work
Thar & Lahore

Grounding Stations at Thar and Lahore

Estimated
1700 MUS$
EPC Cost

Financing Financing will be done through IFIs

Approval
Not yet prepared
Status

Completion 2020-21
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 Pakistans Power Sector is Ready For
Investments in:
Generation
Transmission through wheeling
Transmission Lines
Distribution through Privatisation
Equipment and Materials
Investors are welcome
to avail investor friendly
profitable business
opportunities in
Pakistans Power
Sector

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