The private sector investors have urged the government to extend the deadline for solar power projects bidding in Muzaffargarh to two months after the February 8 general elections, Business Recorder reported.

The recommendation was put forward by M/s Atlas Power, Gul Ahmed Energy Group, and Metro Power Group of Companies in separate letters to caretaker Power and Petroleum Minister Muhammad Ali.

The request was made amid the Development Financial Institutions’ decision to hold back on the clean energy project because of “uncertainty and lower credit rating of the country”.

The government abandoned international competitive bidding after no party – out of the 12 – submitted the bid due to its benchmark tariff. The government had invited bidding via Private Power and Infrastructure Board (PPIB) to submit a levelled tariff for 25 years on a BOOT (Build, Operate, Own, and Transfer) basis in April.

Later, the government relaunched the project after ending the tariff-related issues. But 11 parties purchased the document for submitting the bid.

The DFIs like IFC, BII, ADB, FMO etc indicated no interest in financing the project due to the lower credit rating of the country and uncertainty.

“Second time failure will be a big blow to achieving the cheap and clean energy target. Considering the current situation, we request PPIB to extend the closing date of bidding two months beyond the general elections,” said Maqsood Ahmad Basra in his letter.

Atlas Power urged the ministry and the PPIB to extend the deadline for submission of bids after the polls.

It merits here to mention that a corrigendum by the PPIB stated that the deadline for submission of bids/proposals has been extended up to January 11, 2024. Bids were invited on BOOT basis in September.

Gul Ahmed Energy Group and Metro Power Group of Companies were of the view that the bid deadline after polls would be suitable while highlighting the current risk profile for the interested lenders’ syndicates that is too high. It also mentioned Pakistan’s sovereign credit rating designated at CCC by global rating agency Fitch.

They added that the financing available for a large-scale renewable energy project is expensive for the project sponsors and developers.

They stated that the ministry and the PPIB were asked to provide clarity and focus on the RFP for private transmission projects such as 500 kV line from Jhimpir to Matiari during the roadshow for the 600MW project.

More to follow…