Wind Power Development in Wind Power Development in PakistanPakistan

29th February, 2012

2

HISTORIC SUPPLY AND DEMAND HISTORIC SUPPLY AND DEMAND

ENERGY SITUATION IN PAKISTANENERGY SITUATION IN PAKISTAN(FROM A DIFFERENT PERSPECTIVE)(FROM A DIFFERENT PERSPECTIVE)

Total Population: 180 Million

Electricity Available to: 61% (70 Million without power)

Natural Gas Available to: 21% (140 Million without piped gas)

Diesel Imports 4.5 Million Tones (50%)

Yet there is shortages of Gas and Electricity leading to load shedding.

ENERGY DEMAND TO GROW FASTER:

Pakistan has amongst the worlds highest and fastest rising urbanization. Under 15 population 39%, pointing to spurt rather than gradual increase in energy demand

Higher Economic and population growth, with highest rate of Urbanisation

AFFECTING AGRICULTURE, INDUSTRY, COMMERCE

Tubewells, Transport, Fish-farms, Industry and commerce effected

POOR PAYING THE MOST

Poor are paying 5-7 time more for their fuel costs than those in the cities,

Increase in prices of modern commercial fuel, its lack of availability is forcing the consumer to step down on the energy ladder to biomass.

Needed Power Capacity Needed Power Capacity 2007–2030 (Countrywide)2007–2030 (Countrywide)

1888324474

36217

54359

80566

113695

0

20000

40000

60000

80000

100000

120000

2007 2010 2015 2020 2025 2030

MW

Years

Annual Growth Percentage = 8%

Source of Growth Rate : PEPCO , P&D DivSource of Growth Rate : PEPCO , P&D Div

PEPCO (Thermal)

24%

WAPDA (Hydel)32%Nuclear

2%

IPPs(Thermal)31%

KESC(Thermal)9%

Rental & SPP2%

Thermal (Oil and Gas) - 66%Hydel & Nuclear - 34%

Why Alternative Energy For Why Alternative Energy For Pakistan?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

Renewable Energy Potential: Wind*: 346,000 MW

Solar*: 2.9 Million MW

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

5 -8 Cents

Small Hydro 6 – 9 Cents

Wind 14 Cents

Solar 20+ Cents

RFO

(Thermal)

Expensive*

*dependant on fuel oil prices

Alternative Energy Development Alternative Energy Development Board (AEDB)Board (AEDB)

(Act 2010)(Act 2010)

Wind Resource in PakistanWind Resource in Pakistan

350,000 MW National Potential

50,000 MW in Sindh

Sites in Baluchistan, Punjab and Northern Areas being identified.

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WIND MEASURING SITES IN SIND

Wind Measuring Masts Gharo

Wind Corridor

BHAMBORE JHAMPIR

KHUTTIKUN

Area Where Wind Power

Projects Are Being Executed(Jhimpir)

Land Allocation - Jhimpir

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 documentation which included specific

statement of conditions for Wind Projects

Created Lender / Investor Confidence ADB Counter Guarantee in place Regained Lenders Confidence – OPIC supporting 4, IFC, ADB and IDB 6 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.

Expanding Wind Corridors New corridors identified. New wind masts installed Sindh, Baluchistan and Punjab through

UNDP asst.

Creating Enabling Environment

Resource Risk - responsibility of GoP Guaranteed Electricity Purchase Grid provision is the responsibility of the purchaser Attractive Tariff (17%-18% ROE) Attractive Feed-in Tariff (US Cents 14.66/kWh) Counter Guarantee by the ADB Special Incentives by the State bank for upto 20 MW

plants Free Repatriation of Profits No Import Duties on Equipment Zero Sales Tax Net Metering Banking of Electricity Wheeling Provisions Grid Spill Over Concept introduced Carbon Credits

Fast Track Projects Policy being implemented for COD by March 2013

49.5 MW Wind Power Project of FFC Energy Limited under construction

56.4 MW Wind Power Project of Zorlu Enerji under construction

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

Progress Status of First 550 MW WPPs

Name of ProjectCapacity

(MW)

Project Cost

(Million USD)

Expected Financial

Close

Expected Completion Cumulative

1 Fauji Fertilizer 50 133.56Under

Construction 11-Jun 12-Sep 50 MW

2 Zorlu Enerji Pak 56 143.60 Under

Construction 12-Mar 12-Nov 106 MW

3 Three Gorges 50 134.75Under

Construction 12-Jun 12-Nov 156 MW

4 Foundation 1 50 128.69-Awaiting

Tariff 12-Mar 13-Mar 206 MW

5 Foundation 2 50 128.70-Awaiting

Tariff 12-Mar 13-Mar 256 MW

6 Lucky Energy 50 132.53-Tariff

Received- 12-Apr 13-Apr 306 MW

7 Sapphire Power 50 128.87-Awaiting

Tariff- 12-Jun 13-Jun 356 MW

8 Tenaga Generasi 50 129.67 -do- 12-Jun 13-Jun 406 MW

9 Metro Power 50 132.56 -do- 12-May 13-May 456 MW

10 Master Energy 50 133.68 -do- 12-Aug 13-Aug 506 MW

11 Gul Ahmed 50 132.87 -do- 12-Jun 13-Jun 556 MW

List of Fast Track Wind Power ProjectsSr. 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 50 MW

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

11 System Wind Energy (Turkey) 50 MW

12. Hydro China 300 MW

13. HZ Wind Power (CHINA) 100 MW

  1582.4 MW

Pakistan: Investors Choice Destination

Norway, Turkey, Iran, Germany

USA, China and Japan 2012: 500 MW

2013: 800 MW

2014 +: 1000 ++

Next Focus: Indigenous Manufacturing

Renewable Target 2020: 9700 MW

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

Come invest in the Pakistan Wind Sector

•Wind Risk

•Project Site Availability

•Feed in Tariff

•Standard Agreements

•ADB Counter Guarantee

•Free Repatriation

•Extraordinary Returns

•Special Incentives for local Manufacturer

Thank YouThank You

Thank YouThank You