Saudi based ACWA Power is on the brink of proposing competitive tariffs for solar project of 600 MWp project risk in Pakistan. As per the reports, the firm has installed solar projects at Cents 2 per unit in UAE and Oman.
However, ACWA’s interest in investing in Pakistan’s renewable energy sector has encountered bureaucratic impediments and the absence of a conducive legal framework for government-to-government (G2G) agreements and tariff determination. In a bid to boost ACWA’s interest, Pakistan’s ambassador, alongside the Saudi ambassador to Pakistan, met Mohammad Abunayyan, Chairman of ACWA Power to discuss the possibilities in the sector. Following this dialogue, ACWA Power’s Vice Chairman outlined specific prerequisites to enhance the feasibility of their investment in Pakistan’s renewable energy sector. These requirements encompass the establishment of a G2G framework, bankable project agreements, sovereign guarantees, site allocation, and integration transmission studies.
Furthermore, the subsequent meetings between Pakistani officials and ACWA Power representatives during the Future Minerals Forum in Riyadh underscored ACWA’s readiness to collaborate with Pakistan. The Vice Chairman stressed upon the potential for offering favorable tariffs by mitigating project risks and expressed readiness to address grid stability and base-load issues using innovative technologies.
The Saudi Energy Minister also pledged support for facilitating discussions with ACWA Power, emphasizing the importance of expediting the long-awaited project. The adoption of the Inter-Governmental Commercial Transaction Act 2022 in Pakistan provides a legal framework for G2G agreements, while efforts are underway to determine tariffs through consultant services.
The Pakistani ambassador stressed the significance of ACWA Power’s investment as a litmus test for Saudi Arabia and urged thorough preparation for their impending visit. Success in materializing ACWA’s investment could serve as a catalyst for further Saudi investments in Pakistan.