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WIND ENERGY IN PAKISTANPOTENTIAL, CURRENT STATUS & PROSPECTS

18th July 2012

Alternative Energy Development Board (AEDB)

• ImplementImplement policies, programs and projects through private policies, programs and projects through private sector in the field of Alternative Energysector in the field of Alternative Energy

• Assist and Assist and facilitatefacilitate development and generation of development and generation of Alternative Energy to achieve sustainable economic growthAlternative Energy to achieve sustainable economic growth

• EncourageEncourage transfer of technology and develop indigenous transfer of technology and develop indigenous manufacturing base for AE Technologymanufacturing base for AE Technology

• PromotePromote provision of energy services that are based on provision of energy services that are based on Alternative energy resourcesAlternative energy resources

• UndertakeUndertake RE projects on commercial scale (AEDB Act RE projects on commercial scale (AEDB Act 2010)2010)

Why Alternative Energy For Pakistan?

• Reduced dependence on Imported Oil:

– 2011 Oil Import Bill: $11+ Billion

60% of the total Export Earnings

– 2015 Oil Import Bill US $ 38 Billion (ADB Estimate)

200% of the National Export Earnings

• Large Renewable Energy Potential: Wind*: 346,000 MW

Solar*: Large

Hydro : 58,000 MW

Bagasse : 2,000 MW

Waste to Energy: 2,000 MW

Geothermal 2500 MW

Off-Grid Application: 10,000 MW

Alternate Fuels Large TBD

Energy Source

Cost/Unit

Waste-to-Energy

6-9 Cents

Small Hydro 6 – 9 Cents

Wind 14.66 Cents

Solar 20+ Cents

RFO

(Thermal)

Expensive*

*dependant on fuel oil prices

Wind Resource in Pakistan

• A total of 346,000 MW potentialA total of 346,000 MW potential

• Pakistan has a 1,046 Km Pakistan has a 1,046 Km coastline in the Southcoastline in the South

• Average wind speed more than 7 Average wind speed more than 7 m/s above 60 m in Gharo Wind m/s above 60 m in Gharo Wind Corridor having estimated wind Corridor having estimated wind potential of more than 50,000 MWpotential of more than 50,000 MW

• Other sites in Balochistan, Punjab Other sites in Balochistan, Punjab and Northern Areas identifiedand Northern Areas identified

Gharo W

ind

Gharo W

ind

Corrid

or

Corrid

or

WIND MEASURING SITES IN SIND

1st Phase Wind Power Program in Sindh Province

AREA WHERE WIND POWER PROJECTS ARE BEING EXECUTED

MICRO SITING OF WIND FARMS IN JHIMPIR BY AEDB EXPERTS

Land Allocation - Jhimpir

Wind MET Masts for Wind Mapping

Agency Quantity Location

IPPs 16 Gharo & Jhimpir (Sindh)

AEDB / UNDP-GEF 10 Gharo Wind Corridor (Sindh)

Barrick Gold Corporation 5 Reko Diq, Balochistan

India has installed 1100 Wind measuring masts for the development of Wind program.

UNIQUE FEATURES OF RE POLICY 2006

• Guaranteed Electricity purchase• Grid provision is the responsibility of the purchaser• Protection against political risk• Attractive Tariff – Cost Plus • Upfront Tariff of US$ cents 14.66 per kWh• Return on investment is between 17% to 18%• No Import Duties on Equipment• Zero Sales Tax• No Income Tax • Repatriation of Equity along with dividends freely allowed• Permission to issue corporate registered bonds• Permission to issue shares at discounted prices • Convertibility of PKR into USD

Other Incentives for Wind Project Investors

• Standardized Project Documents have been developed keeping in view norms of international wind industry.

• Regional EIA study for Gharo ~ Keti Bandar Wind Corridor has been conducted and EIA guidelines for EPA are developed

• Electrical Studies have been conducted for wind power projects planned in Gharo ~ Keti Bandar Wind Corridor in short & medium term.

• Grid Code amended specific to Wind Energy.

• ADB has announced counter guarantee for wind IPPs; thereby resulting in reducing the credit rating risk of Pakistan for financing.

• SBP has announced refinanced facility for RE projects up to 10 MW.

Created Enabling Environment:• Feed-in-Tariff as well as Cost Plus tariff with Wind risk available• Grid Code Amended for Wind Power• Streamlined Land Issues by developing standardized, legally vetted documentation

Created Lender / Investor Confidence • Circular Debt Concerns Addressed – ADB Counter Guarantee in place• Regained Lenders Confidence – OPIC supporting 4, IFC, ADB and IDB 3 Projects. • Lender Acceptable Standardized the Project Documents (PPA / IA / Wheeling) Available• Regional Environment Impact Analysis, approved by donors available to investors

Reduced Lead Times And EPC Contract From Turbine Manufacturers • All major turbine manufacturers now offering 4-6 months delivery and EPC contract

Encouraged Local Manufacturing• DESCON now producing Wind Masts for Nordix Machines. HIT negotiating Turbine Assembly with CWE.

Inclusive / Cooperative Approach• All Provinces now a full member of AEDB Board, and RE Policy Review team. • New corridors identified. New wind masts installed Sindh, Baluchistan and Punjab through UNDP asst.

Developing the Wind Sector

Project In Pipeline

• Projects in Pipeline:

– M/s FFC Energy achieved Financial Close in June 2011.

– M/s Zorlu Enerji achieved Financial Close in May 2012

– Following IPPs expected to achieve Financial Close for 50 MW each this year;

i. Fauji Foundation (100 MW)

ii. Three Gorges First Wind Farm Pakistan

iii. Tenaga Genarasi

iv. Lucky Energy

v. Gul Ahmed Power

vi. Metro Power

vii.Sapphire Wind Energy

viii.Dawood Power

17

First 550 MW WPPs

Name of ProjectCapacity

(MW)Project Cost (Million USD) Status Financial Closing

1 Fauji Fertilizer 50 133.56Under

ConstructionAchieved- June 2011

2 Zorlu Enerji Pak 56 143.60 Under

ConstructionAchieved- May 2012

3 Three Gorges 50 134.75Under

ConstructionOct - 2012

4 Foundation 1 50 128.69 -Tariff Received- Aug - 2012

5 Foundation 2 50 128.70 -Tariff Received- Aug - 2012

6 Lucky Energy 50 132.53 -Tariff Received-Dec – 2012

7 Sapphire Power 50 128.87 -Tariff Received-Dec – 2012

8 Tenaga Generasi 50 129.67 -Tariff Received-Dec – 2012

9 Metro Power 50 132.56 -Tariff Received-Dec – 2012

10 Gul Ahmed 50 132.87 -Tariff Received-Dec – 2012

11 Master Energy 50 133.68 -Tariff Awaited-Feb - 2013

List of Fast Track Wind Power Projects

Sr. No. Company Name Project Capacity

1. NBT Wind Power (Norway) 500 MW

2. Titan Energy Pakistan (Pvt.) Ltd. 10 MW

3. Tapal Wind Energy (Pvt.) Ltd. 10 MW

4. Ismail Power Limited 10 MW

5. Fina Energy (Turkey) 250 MW

6. FFC Energy 100 MW

7. Japan Green Power (Japan) 50 MW

8. Associate Technologies 100 MW

9. Anadulo Wind Pakistan (Turkey) 50 MW

10. China Sunnec Energy (Pvt.) Ltd 50 MW

11 System Wind Energy (Turkey) 50 MW

12. Hydro China (China) 300 MW

13. HZ Wind Power (China) 100 MW

14. Hartford Energy (USA) 45 MW

  1582.4 MW

Pakistan: Investors Choice Destination

(Norway, Turkey, Iran, Germany, USA, China and Japan)

• Foreign investment by 2013: (US $ 1.2 – US $ 2.7 Billion)

• 400-450 MW on existing Lands

• 1000 MW Additional if land is made available immediately.

• Next Focus: Indigenous Manufacturing

Wind Sector is attracting the largest investment of any sectors in Pakistan

Under Construction Wind FarmUnder Construction Wind Farm

Turbine Foundation – With 62 Ton Turbine Foundation – With 62 Ton SteelSteel

Zorlu Wind

Farm

Jhimpir

Roter – Weights 72 tonnes

Requires 600 Ton Crane – Not Available in Pakistan

PICTURE OF THE WIND BLADES

Zorlu Wind FarmZorlu Wind Farm

56.4 MW Wind Power Project of Zorlu Enerji under construction

49.5 MW Wind Power Project of FFC Energy Limited under construction

Construction / civil works at 49.5 MW wind project of M/s Three Gorges Pakistan

Thank YouThank You