Surge in investment in Wind Mills

Posted on August 29, 2011. Filed under: Alternative |

AS many as 16 windmills with a combined capacity of 800MW of electricity, being installed in the 60 km wide Gharo — Jhimpir Wind Corridor in Thatta District, are expected to go into operation by 2013.

The electricity produced in these windmills (each unit of 50MW) would be supplied to the National Grid.

According to an estimate, the southern part of Sindh possesses the potential to produce 50,000MW electricity through wind energy. Wind energy is now the focus of Sindh Board of Investment which has facilitated setting up of these ongoing projects.

As per official policy, tariff fixed for the wind power would be 10 to cents per kwh for the first 10 years, to be reduced to four cents per kwh in the following decade.

Of the 16 under-construction windmills, three are expected to start production by next year. These are (a) a project of Zoriu Enerji Company of Turkey located at Jhimpir. In the first phase six MW unit was commissioned in 2009 while the project is extendable up to 300MW. (b) Fauji Fertiliser Wind Mill at Kuti Kun Island and (c) China International Water and Electricity Company project at Jhimpir.

The rest 13 units, expected to start operation in Jhampir and Bahmabore by 2013, are: Sapphire Wind Power, Metro Power, Gul Ahmed Wind Power, Master Wind Energy , Zehphyr Power, Lucky Power, Beacon Energy, Green Energy, Kuttikin (Jhimpir), Temaga Generasy, Daoud Power, Sachal Engineering Works, Wind Eagle and Abbas Steel Group.

Besides, six more companies are reported to have applied to build windmills in this belt and have even deposited the required guarantee amount.They are in the initial stage of pre paring feasibilities etc.

The investment in wind energy has been encouraged by Sindh government’s policy to provide following incentives and facilities: (i) leasehold land available for the life of project to eligible investors on attractive annual rentals ( $10 per acre), (ii) long-term (20 year) agreements with the power purchaser i.e. Wapda backed by Government of Pakistan’s sovereign guarantee (iii) guaranteed purchase of all electricity produced by the project for the entire concession period of 20 years with adequate compensation for periods when power purchaser is unable to take up the energy produced, (iv) comprehensive coverage to investors against political risk and risk of change of law through force majeure provisions, (v) guarantee of buy-back of the facility in case of termination of the project, (vi) wind data from various sources to be made available for five years, enabling a great degree of accuracy for the purposes of calculation of wind speed, direction, density, frequency etc, ( vii) coverage of wind speed risk for the pioneering projects based on benchmark wind speed set by AEDB, (viii) development of benchmark wind speeds for Gharo-Jhimpir Corridor, (ix) comprehensive tariff regime on a cost plus basis, (x) fiscal incentives through a zero tax/duty regime.

The only contribution to national exchequer would be through a 7.5 per cent withholding tax on dividends declared across the life of the project, (xi) Attractive return on equity of 17 to 18 per cent – offered under the NEPRA tariff guidelines, (xii) Certified Emission Reductions (CERs) available on a shared basis with the Government of Pakistan, (xiii) environmental issues facilitation by AEDB to investors including EIA and relevant government permissions, and ( xiv) development of standardised project documentation keeping in view the norms of international wind power industry.


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