Saudi company ACWA Power is poised to present a competitive tariff for a 600 MW solar project in Pakistan, citing its success in delivering solar projects in the UAE and Oman at just 2 cents per unit, according to insider sources.
The Interest from ACWA Power in Pakistan’s renewable energy sector has been longstanding, with directives from the Kingdom’s leadership. However, actual investment has been stalled due to various factors, including the absence of a Government-to-Government (G2G) framework law and tariff determination for such projects. This delay has led to frustrations on the Saudi side and repeated concerns from Saudi leaders about bureaucratic hindrances to investment in Pakistan.
Efforts to reignite ACWA Power’s interest in Pakistan were seen on October 23, 2023, when Pakistan’s ambassador, alongside Saudi Ambassador to Pakistan Nawaf Al Malki, met with Mohammad Abunayyan, Chairman of ACWA Power. They urged him to share specific investment requirements for the renewable energy sector in Pakistan.
In response, the Vice Chairman of ACWA Power outlined key requirements in a letter aimed at enhancing the viability of investments in Pakistan’s renewable energy sector. These included the necessity of a bilateral G2G framework, bankable project agreements, sovereign guarantees, site allocation, and integration transmission studies.
Continuing the dialogue, Pakistan’s ambassador conducted two crucial meetings during the Energy Minister’s visit to Riyadh for the Future Minerals Forum on January 9-11, 2024. The first meeting was with ACWA Power’s Vice Chairman, Raad Al-Saady, and the second with Saudi Energy Minister, HRH Prince Abdulaziz bin Salman Al-Saud.
In the meeting with ACWA Power, the Vice Chairman highlighted that the low tariffs achieved in Oman and the UAE were a result of low project risk. He emphasized the importance of measures outlined in the letter to de-risk projects in Pakistan and enable competitive tariffs. ACWA Power expressed willingness to collaborate with Pakistan to enhance grid stability and address base-load issues using innovative technologies. The Vice Chairman conveyed intentions to visit Pakistan soon to further discussions.
