In a significant move for Pakistan’s renewable energy sector, the National Electric Power Regulatory Authority (Nepra) has amended its regulations to exempt renewable energy projects established by foreign countries under the Inter-Governmental Commercial Transactions (IGCT) Act, 2022. This decision also applies to projects that have qualified under the Integrated Generation Capacity Expansion Plan (IGCEP) 2021.
The amendment comes after a split decision within Nepra, with some members expressing opposition to the exemptions. Despite the resistance, the amendment was approved with a majority vote. The approved changes will affect the establishment of renewable energy projects, particularly those involving foreign investment under the IGCT framework.
Key Highlights of the Decision:
- Exemption for Foreign Projects: Renewable energy projects, particularly those backed by foreign governments, will be exempt from some provisions of Nepra’s laws, including the rules governing power procurement. This change will apply to projects that are part of agreements between Pakistan and foreign countries under the IGCT Act.
- Saudi and Chinese Investment: The government of Pakistan is in advanced discussions with Saudi Arabia’s ACWA Power to establish a 600 MW solar project in Kot Addu, under the IGCT framework. Similarly, discussions with Chinese companies are also underway for similar projects. These projects will benefit from the new amendments to Nepra’s law, ensuring clarity for investors.
- Commitment to IGCEP 2021 Projects: The amendment also provides an exemption for renewable energy projects that were already committed under the IGCEP 2021. This includes projects that have been stalled or delayed, such as those administered by the Peshawar Electric Supply Company (PEDO). Around 400 MW of committed projects are expected to benefit from this change.
Further Regulatory Changes:
The changes to Nepra’s regulations include:
- Regulation Exemptions: Projects approved under the Alternative & Renewable Energy and Distributed Generation and Net Metering Regulations, 2015 will be exempt from certain provisions of the Electric Power Procurement Regulations, 2022.
- Commitment to IGCEP Projects: Specific projects committed under the IGCEP before the regulation’s implementation will now receive regulatory leniency.
The government hopes that these regulatory amendments will help streamline the development of large-scale renewable energy projects and attract more foreign investment in the sector, supporting Pakistan’s clean energy goals. -BR
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