Inamur Rahman, CEO of Reon Energy Limited, said: “The AAE financing model is a third-party ownership model that has been used successfully in developed markets. Such models are a huge opportunity to develop new businesses and reduce energy costs for existing ones. Pakistan has a lot of sun, which can be used more efficiently through these financing arrangements. According to the company, promoting the future of solar energy introduction with the Power Purchase Agreement (AAE) could be a groundbreaking agreement for Pakistan`s solar energy industry in the early years and for consumers in the long term. On the other hand, the government guarantees the purchase of electricity from projects carried out by public bodies on a “take- or pay” basis. This means that the government would be responsible for both capacity payments and energy payments from an available facility, even without generating electricity, as is currently the case. Energy projects currently in place and implemented under the China-Pakistan Economic Corridor (CPEC) will be protected. He said that the revision of the national electricity policy and the national electricity plan will soon be subject to consideration by the Council of Common Interests (ICC). As part of the plan, it was decided that energy capacity should be increased each year in the energy mix, based on demand and supply, taking into account the needs of different sources – hydroelectric, solar, gas, LNG, coal, nuclear energy, etc. – to ensure that purchases are not forced as emergencies.
“Why should the government guarantee electricity purchases, it should be based on demand and supply,” Leghari told the Senate briefly. He said the government was cooperating with the Securities and Exchange Commission of Pakistan (SECP) to ensure that electricity, like any other commodity, would be traded within six months. ISLAMABAD: Faced with the capacity trap, the government decided on Tuesday to significantly change its energy policy and to refuse electricity purchases guaranteed by future private sector producers. He stated that the additional performance capacity for the tenders would be obtained and that their contract duration would also be set at about 15 years instead of the existing agreements for 25 to 30 years. Several policy areas were discussed at the meeting, including the cogeneration of the sugar industry and renewable energy policy in 2006. A number of energy sector development projects have also been reviewed and will be implemented to diversify the country`s existing energy mix, including wind, solar and hydelenergie projects.