He said that investment commitments of $500 million have been made for energy projects. Four wind projects were at advanced stage, while 12 projects have completed their financial close. They included Zorlu of Turkey, CWE of China, Three Gorges, Fauji Fertilizers, Fauji Foundation, Arif Habib and Lucky Cement, he added. He was of the opinion that 1,200 MW will be added to the national grid every year from 2013.
Replying to a question, Alauddin said that Zorlu will sign power purchase agreement with National Transmission and Despatch Company(NTDC) this week. He pointed out that AEDB has a large number of applications from potential investors for wind mills to generate 1600 MW of electricity. They have also submitted the surety amount of $300,000.
To a question about circular debt, Alauddin said this is not an issue with wind energy projects. AEDB has arranged a counter guarantee worth $ 200 million from Asian Development Bank (ADB) for the private sector wind projects.
For example, ADB has provided $ 32 million counter guarantee to Fauji Foundation on its equity for $ 130 million project.
ADB had offered $ 500 million loan to AEDB for the development of alternate energy projects in Pakistan. But, we requested ADB to convert this loan into a counter guarantee for alternative energy projects from private sector. They have agreed to our proposal and allocated $ 200 million as the initial step, he added.
He said that currently, seven projects were under consideration for this counter guarantee. Alauddin said that financing is no more an issue for wind mills after this facility. Most of the wind projects are being financed by Habib Bank Ltd, he pointed out.
He, however, said that acquisition of land is still an issue which AEDB is trying to resolve with the help of Sindh Government. Responding to a question about the tariff for wind energy, he said upfront tariff is fixed at 14.66 cents per kilowatt.