Scatec Solar, Nizam Energy to build $300m solar power plants in PakistanJuly 7, 2015
KARACHI: On the occasion of Pakistani Prime Minister Nawaz Sharif’s visit to Norway, Scatec Solar and Nizam Energy signed an agreement today to jointly develop and Build-Own-and- Operate solar power plants in Pakistan. The signing ceremony took place in the presence of Norwegian Prime Minister Ms Erna Solberg and Prime Minister Sharif.
The development and financing of the 150 Megawatts (MW) solar plants are expected to be completed towards the end of 2015, with construction starting in the first quarter of 2016. The photovoltaic plants involve an initial investment of nearly USD 300 million. The projects, comprising three plants generating 50 MW each, are to be completed in about a year. An additional 150 MW is planned to be developed in a second stage, bringing the total investment to nearly USD 600 million. The 150 MW plants will be able to power about 150,000 homes during peak daytime hours.
Raymond Carlsen, CEO of Oslo-headquartered Scatec Solar ASA (SSO) and Usman Ahmad, CEO of Karachi-based Nizam Energy (Pvt) Ltd signed the agreement on behalf of their companies.
The solar projects aim to stimulate investment from global and local investors in Pakistan. They will provide more than 1,000 jobs to people in the region during the construction phase. Thereafter, for the long term operation of the plants, 60 people will be employed. As in all other countries where it operates, Scatec Solar will put special emphasis on transferring technical expertise to the local community.
In the run-up to the UN Climate Summit in Paris this December, there is widespread demand for clean energy. These solar energy projects will combat climate change by reducing CO2 emissions by about 300,000 tons when completed. Pakistan’s Central Power Purchasing Agency (CPPA) will purchase the electricity generated by the joint venture for a duration of 25 years and will receive 50 % of the revenues from Carbon Credits generated by the project. From the 150 MW solar plants, an estimated 290 Gigawatt hour (GWh) of electricity per year will be added to the grid, which will go up to about 580 GWh when the second stage is completed.
Pakistan faces an acute energy crisis. Electricity shortfall has exceeded 7,000 MW, which is about one- third of peak demand during extreme periods. If this energy deficit is addressed, experts say, Pakistan could increase its GDP by as much as two per cent annually through additional production, exports and employment. In July 2013, shortly after taking office, the Nawaz Sharif Government introduced a new Power Policy that aims to significantly increase power generation.
Raymond Carlsen said: “This project is an important landmark in Scatec Solar’s journey to provide clean and affordable energy in developing countries. The Pakistani authorities have shown their commitment to addressing the nation’s rising energy demand.” Usman Ahmad remarked: “Access to energy is a prerequisite to improve standard of living. We are keen to increase the role of clean solar power in Pakistan’s energy mix.”
Apart from being the majority shareholder in the project, Scatec Solar ASA (SSO) will also be responsible for the financing, turnkey construction, operation and maintenance of the projects, thus demonstrating it’s long-term commitment to the smooth functioning and efficiency of projects undertaken. Nizam Energy will be the local co-developer, co-investor and a key partner during construction and operation phase. The two partners have been working together since late last year to develop solar power projects in Pakistan.