Hydro Power Policy

Hydro Power Policy (Top)

Hydro Power Policy 2016 offers profitable business opportunity, modern engineering and technical processes, lowercosts of doing business so that local and international investors may fully participate as partners in the development of hydro power projects

1. Objectives

The main objectives of the Power Policy are:

• To provide least cost power generation
• To encourage private sector investment through full cost recovery and attractive rates Of return
• To ensure fast track and transparent development of power projects
• To encourage and ensure participation of investors in the development and implementation of hydro power projects
• To ensure participation, development and welfare of all stakeholders
• To provide green energy

2. Scope of the Power Policy

• Private Sector
• Public sector under the Independent Power Producer (IPP) model where relevant Concessions under Power Policy are applicable
• Public Private Partnerships where relevant concessions under Power Policy are applicable
• Captive Power Plants

3. Hydro Power Projects

• Hydro Power Power Projects (Track A)
  • Raw site hydropower projects, for which neither feasibility study nor, detailed engineering design is available and identified by the sponsors/investors themselves
  • Semi-raw site hydro power projects where site has already been identified based on prefeasibility study or otherwise
  • Hydropower projects with complete bankable feasibility study or detailed engineering design carried out by private or public sectors

• Hydro Power Projects Track B
  • Hydropower projects under Public Private Partnership or any other mode of investment
  • Private, Public or Public PrivatePartnershipHydropower Projects initiated and or awardedbyPEDO under the Power Policy where:
    • Power Purchaser is a Federal Entity or Provincial Entity
    • Transmission and Distribution Network of a Federal Entity or Provincial Entity is used
    • Tariff is determined or approved by NEPRA or GoKP or Provincial Regulator
    • GOP Guarantee is required. The aforesaid projects, on request of the PEDO, may be further processed by Private Power Infrastructure Board (PPIB) or Alternate Energy Development Board (AEDB) under Tripartite Letter of Support (LOS) regime

4. Investment opportunities in Hydro Power

In order to attract investment in hydropower projects GoKP offers;

• Sustainable and investor friendly provincial energy policy 2016
• PEDO provides one window operation and technical help to the Investors
• Minimum project processing time - less than 3 years
• No pester in obtaining NOC’s and Water Use Charges
• Facilitation in Land Acquisition Process
• Assistance in evacuation of power process

5. Benefits to investors

• An attractive rate of return with repatriation of equity along with dividends is freely allowed, subject to the prescribed rules and regulations. Nepra approved tariff - minimum 17% Return on Equity
• Guaranteed upto 30 years (concession period) purchase of power through tri-party PPA (Power purchase Agreement) backed by GoP Guarantee
• Permission for power generation companies to issue corporate registered bonds.
• Permission for foreign banks to underwrite the issue of shares and bonds by the private power companies to the extent allowed under the laws of Pakistan.
• Permission to issue shares at discounted prices to enable venture capitalists to be provided higher rates of return proportionate to the risk.
• No provincial taxes will be levied on the sponsors of power plants based on hydel and other renewable sources.
• Customs duty at the rate of 5% on the import of plant and equipment not manufactured locally, including spares.
• Hydrological risk will be borne by Power Purchaser
• Parties may raise local and foreign finance in accordance with regulations applicable to industry in general; GOP approval may be required in accordance with such regulations.

6. Semi-Raw Hydro Power Projects for Pvt. Sector Investment

Following seven (07) Semi-Raw Hydro Power Projects are planned to be offered to private sector for investment:

7. PEDO current Hydro Power Projects

8. 
   Download Hydro Policy 2016

Hydro Power Policy ..\KP Hydropower Policy 2016.pdf

Guidelines for Processing of Hydro Power Generation ..\Guidelines For Processing of Hydropower Generation Projects.pdf