Pakistan has paused its $300 million floating solar power project, a visionary initiative aimed at generating 300 megawatts of clean energy. This decision follows its exclusion from the 2024-2034 Indicative Generation Capacity Expansion Plan (IGCEP). The government has instructed the World Bank to halt loan preparations for the project, citing the need for further evaluations and challenges in securing power purchasers.
The project was to be built on the water bodies of Tarbela and Ghazi Barotha hydropower sites, eliminating the need for new transmission lines. Approved in 2021, it was set to begin power generation in 2026 and connect to the national grid by May 2027. The project offered electricity at a fraction of the cost of existing thermal plants, with potential savings exceeding 60% compared to 64 thermal units.
This groundbreaking initiative promised substantial economic and environmental benefits, including a $72 million annual reduction in foreign exchange costs and an economic rate of return (ERR) of up to 51% when factoring in environmental advantages. By replacing expensive thermal plants, the floating solar project would have contributed to cleaner energy and improved air quality in Pakistan.
Despite these advantages, the project faced hurdles, including the influence of thermal fuel importers and a lack of guaranteed power purchasers. Wapda’s revised proposal reduced the project cost to $238 million, with a competitive tariff of 2.98 US cents per unit—the lowest in the region. However, the Power Division decided against including it in the IGCEP, citing the need to reassess Pakistan’s long-term energy strategy.
The energy ministry has expressed optimism, stating that the project could be revived once the government finalizes its priorities and investment plans. This reassessment comes at a time when Pakistan is grappling with energy challenges, including reliance on costly and inefficient thermal power plants and growing environmental concerns.
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