The rising share of private sector in electricity generation and presence of some of the leading foreign and local companies in this business, are evidence of Pakistan being an ideal investment destination. Thus the need to develop alternate energy resources is inevitable. Wind energy has the advantage that it can be utilized independently, and deployed locally in rural and remote areas. The location far away from the main grid finds wind suitable for generating electricity.
Over 140 micro wind turbines of 500 Watts each are operational in Sindh and Balochistan, providing electricity to 691 houses in eighteen (18) remote, off-grid villages. Wind generating energy unit of 50MW in coastal areas of Pakistan are feasible project and payback period of 4-5 years on the tariff rate agreed with WAPDA @ 10.27 us cent/unit.
Taili Wind power has worked out on the feasibility of 50 MW (1.5 MW – 33 sets) wind turbines in coastal areas of Pakistan
Environment
Wind energy is the most environment-friendly source of power. Pakistan is blessed with Renewable energy resources and correct decisions at the right time are vital for prosperity and poverty elevation. Alternative Energy Development Board (AEDB) has been established to promote all environmental friendly alternatives / renewable energy resources that have not been developed in Pakistan mainly due to the absence of a high level national body. The oldest and most widely used renewable energy resources are solar and wind, which has shown prospectus and potential for efficient utilization. In the recent past, wind energy has emerged as clean, abundant, affordable, inexhaustible and environmentally benign source of energy Using a 1 MW wind turbine to produce electricity instead of burning coal will leave 900,000 kilograms of coal in the ground and reduce annual greenhouse gas emissions by 2,260 tones. Market analysts predict a 30% annual growth in wind industry for the next ten years in Pakistan.
Fiscal Incentives
• No custom duty or sale tax for machinery equipment and spares (Including construction machinery) meant for the initial installation or for balancing, modernization, maintenance, replacement or expansion after commissioning of projects for power generation utilizing renewable energy resources (Specifically, small hydro, wind, and solar), subject to fulfillment of conditions under the relevant SRO.3
• Exemption from income tax, including turnover rate tax and
withholding tax on imports.
• Repatriation of equity along with dividends freely allowed, subject to rules and regulations prescribed by the State Bank of Pakistan.
• 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.
• Non-Muslims and non-residents shall be exempted from payment of Zakat on dividends paid by the company.
Financial Incentives
• Permission for power generation companies to issue corporate
registered bonds.
• Permission to issue shares at discounted prices to enable venture capitalists to be provided higher rates of return proportionate to the risk.
• Permission for foreign banks to underwrite the issue of shares and bonds by private power companies (IPPs) to the extent allowed under the laws of Pakistan.
• Non-residents allowed purchasing securities issued by Pakistani companies without the State Bank of Pakistan’s permission, subject to prescribed rules and regulations.
• Independent rating agencies are available in Pakistan to facilitate investors in making informed decisions about the risk and profitability of the project company’s bonds/TFCs.