The Federal government has been working on altering the standardised Security
Package Documents (SPDs) of solar projects to ensure that more investments can
be attracted for the sector.
Previously the Economic Coordination Committee (ECC) of the Cabinet that the
Federal Cabinet on October 18, 2022 had approved several interventions under
the Framework Guidelines for Fast-Track Solar PV Initiatives 2022.
The Framework Guidelines, at Section 2.1.2 (xi) stated that (xi) seventy percent of
the total tariff will be indexed quarterly -basis with exchange rate variation
(USD/PKR). No other indexation will be provided for the term of the project.
The Section 2.1.2 provided that (xvi) in addition to the GoP guarantee, the
payment under the EPA would be ensured on the 60 day after invoice through
bank debit from the dedicated solar account to be maintained by CPPA-G.
This requirement was edited during the meeting of the ECC held on November 14,
2022 as “(i) the new payment mechanism proposed under the Security Package
Agreements for settlement of invoices through bank debit from a dedicated solar
account to be maintained by the purchaser be deleted and replaced with the
standard payment mechanism given under the earlier ECC approved
agreements…”
But after observing the market response on the approved modifications it was
argued by the Alternative Energy Development Board (AEDB) that the changes
made in the Standardised Security Package Documents be reverted to the extent
of indexation and payment mechanism.
After consideration the Power Division submitted following proposals for
consideration and approval of the ECC: (i) indexation of tariff in the SPDs be
retained on quarterly basis as per Section 2.1.2 (xi) of the Framework Guidelines;
and (ii) the proposed payment mechanism for settlement of invoices through
bank debit from a dedicated solar account to be maintained by the purchaser be
included in the Security Package Agreements as per Section 2.1.2 (xvi) of the
Framework Guidelines. After detailed discussion, the ECC has approved
amendments to the SPDs.
