Saudi firm M/s ACWA is reportedly unable to sign pacts on solar projects in Pakistan due to security concerns and the absence of some key enabling factors, well-informed sources told Business Recorder.

Sharing the details, sources said, that Pakistan’s Ambassador in Riyadh recently met Chairman ACWA Power, Muhammad Abunayyanan. The Saudi Ambassador to Pakistan was also present at the meeting.

ACWA Power is a developer, investor, and operator of a portfolio of power generation and water desalination plants with a presence in 12 countries whose power sector portfolio is in excess of $ 74.8 billion and a capacity of more than 50 GW of power and 7.6 million m3/day of desalinated water.

According to Pakistan’s Ambassador, ACWA Power was interested in investing in the solar sector of Pakistan but its efforts could not materialize due to security concerns and the absence of some key enabling factors, notably the lack of base tariff, the legal framework for G-to-G collaboration, land, ability to pay for power and the issue of connectivity with the grid.

Ministry of Foreign Affairs argued that this is a very important initiative for the Saudi government and Crown Prince MBS is himself interested in it, which he mentioned to former PM Shahbaz Sharif in a meeting in October 2022.

The sources said, to pursue this high-profile proposal, Chairman Abunayyan agreed to the Ambassador’s request to undertake an exploratory visit to Pakistan for focused meetings and briefings at the Ministry of Energy. To this end Pakistan’s Ambassador has suggested advance preparations by Power Division and other stakeholders so as to make the visit fruitful.

K-Electric (KE) has shown an interest in the development and offtake of power from renewable energy (RE) projects of 3,000 MW to be developed by M/s ACWA Power, which is mainly focusing on Saudi Arabia.

The KE, being the only private and vertically integrated utility company in Pakistan, is responsible for the generation, transmission, and distribution of power in Karachi and its adjoining areas thereby, serving over 3.4 million customers.

The KE remains obligated for end-to-end planning of its power value chain and performs the functions of a planner for its service area.

The ACWA Power is a global investment and holding company with its headquarters in Riyadh, Saudi Arabia. With a strong presence in the energy and water sectors, ACWA Power operates across multiple countries, including Saudi Arabia, the United Arab Emirates, Jordan, Egypt, Morocco, Oman, and others.

According to the letter written by the KE’s Chief Executive Officer (CEO), Syed Moonis Abdullah Alvi, to the federal government, KE, has formulated a robust long-term development plan which focuses on the development of RE projects and base load capacity based on indigenous resources.

Development of RE generation projects is a cornerstone of KE’s long-term generation planning strategy, which is in the process of developing of several RE-based initiatives.

CEO KE maintains that to further increase its RE footprint, KE believes that engagement with ACWA Power, a formidable development company and sponsor has the potential to fast-track development of large-scale RE projects in Pakistan.

The ACWA had previously tried to venture into the Pakistani market where it entered into a memorandum of understanding (MoU) in 2019 with the Government of Pakistan, which encompassed investment of $ 4 billion in solar and wind energy sector.

Unfortunately, past interest could not be actualized due to various impeding factors. However, KE is confident that it can convince ACWA Power to reconsider its interest for developing RE projects Pakistan to sell power to KE, and to work as its joint partner.