Islamabad: The World Bank has signed an agreement with Pakistan to finance the Sindh Solar Energy project, a news source reported. The agreement, which is worth $100 million, will increase solar power generation and improve electricity access in Sindh.
The agreement has been finalised after seven months – following loan approval by the lender’s Washington-based board of directors. It requires Pakistan to pay the amount back in thirty years, and offers a grace period of five years.
The finance ministry reported that the project will support solar power production in three market segments. It will impact the concerns of utility-scaling, distributed generation, and household electricity provision.
To encourage utility-scaling, solar parks are to be developed. This will promote investment in the private sector, and support the launch of a first competitive bidding initiative for solar power production. The bidding will initially include an auction for a 50-megawatt pilot solar project.
For distributed generation, solar photovoltaic (PV) panels of at least 20 megawatts will be erected on rooftops. Public-sector buildings and other available spaces will be used for this purpose.
Meanwhile, 200,000 household with zero or low electricity access will be fitted with solar energy systems. Private sector firms will be allowed partial grants to make this venture possible. Overall, the project will encourage independent power producers to generate 400 megawatts of new solar power capacity.
The total cost of the project is expected to amount to $105 million. The Government of Sindh will provide an additional $5 million. Public funding will facilitate private sector investment and expertise-input within the targeted market segments.
This project will put Pakistan on the path towards issuing low carbon emissions; thereby reducing environmental degradation levels.
