1. INVESTMENT OPPORTUNITIES IN POWER SECTOR OF PAKISTAN

2. Sequence
ENERGY MIX OF PAKISTAN
DEMAND-SUPPLY SCENARIO OF PAKISTAN
POLICY INCENTIVES FOR IPPs
POWER PLANTS
TRANSMISSION LINES
POLICY INCENTIVE FOR RENEWABLE ENERGY
SPECIFIC PROJECT OPTIONS

3. OVERVIEW OF PAKISTAN’S POWER SECTOR
At present the following entities are responsible for delivery of power to the end consumers:
One Transmission and Dispatch Company (NTDCL)
Ten Distribution Companies (DISCOs)
Four Public Sector Generation Companies (GENCOs)
Thirty One (31) IPPs
The Electricity Generation is blend of Hydel and Thermal Units.
Total installed capacity is around 25,000 MW with 53% and 47% Share of Public and Private Sector respectively.
Currently Country is facing deficit of around 6,000 MW in peak summer months whereas the power demand has been growing by 6-7% per annum resulting into load shedding of 8-16 hours.
Expansion in Transmission Network is required to evacuate power from upcoming projects.
Due to Financial Constraints in the Public Sector, the GOP is focusing on private sector to invest in PPS to bridge the electricity demand supply gap. 3 3 3

4. PAKISTAN ENERGY MIX

6. PAKISTAN POWER SECTOR –
CURRENT SCENARIO
In the peak summer months, electricity demand-supply gap reaches up to 6,000 MW resulting in load-shedding of up to 8-16 hours per day
Even if the maximum capability of 18,477 MW is assumed, country would need additional 13,310 MW (net) by the year 2020, requiring an investment of $15 billion
The government is looking towards private sector to bring additional generation on coal, hydro and renewable energy on fast track basis
In order to encourage private sector, the government has been issuing various policies/ guidelines from time to time in the past at both federal and provincial levels 6 6 6

7. PLANS TO ENHANCE POWER GENERATION CAPACITY AND ALLIED INFRASTRUCTURE
The Present Government is striving hard to overcome the ongoing power crisis which has adversely impacted the National Economy.
A number of initiatives are in progress to enhance generation capacity of the system, including power plants based on coal, hydel, gas and renewable resources, both in public as well as private sector.
The GoP has recently approved Power Generation Policy 2015 which provides attractive incentives for private investors
Extensive networks of high voltage transmission lines and grid stations are being developed to evacuate power from upcoming mega coal and hydel projects to be located southern and northern part of country.
The GoP has approved Private Transmission Line Policy for allocating private investment in high voltage transmission lines 7 7 7

8. POWER GENERATION POLICY 2015 SALIENT FEATURES/ INCENTIVES
PPIB /relevant entities in the Provinces / AJK / GB will provide a one-window facility for implementation of projects under the Policy.
Exemption from Corporate Income Tax, Turnover Tax, Withholding Tax and Sales Tax, only 5% concessionary Import Duty on plant & equipment not manufactured locally
GOP Guarantees obligations of power purchaser & provinces
GOP provides protection against Political Force Majeure, Change in Law and Change in Duties & Taxes
For Hydro Power Projects; WUC will be Rs /kWh to the province where the project is located.
Power Purchaser to bear Hydrological Risk for Hydro projects 8 8 8

9. POWER GENERATION POLICY 2015 SALIENT FEATURES / INCENTIVES
Attractive ROE provided by the Regulator – Imported Coal: 27.3 ; Local Coal: 29.5; Thar Coal: 34.5; Hydro: 23% ROE ; Gas/LNG: 18% ROE
To mitigate high underground geological risk, long construction period and environmental sensitivities following tariff re-openers are provided by NEPRA
Cost Escalation in Civil and Cost Variation for E&M works
Resettlement Cost
Cost variation due to Geological Conditions limited to Tunnel Area
Tariff indexation for inflation (US CPI & Pak WPI)
Government ensures conversion of Pak Rupee & remittance of foreign exchange for project-related payments 9 9 9

10. INVESTMENT INITIATIVES (Coal based Power Projects)
At present, various local and imported coal based IPPs are under process with PPIB, most of which are being developed under the China Pakistan Economic Corridor (CPEC)
PPIB, after consultation with the stakeholders, has finalized and shared Security Package Documents with the Sponsors (Implementation and Power Purchase Agreements)
Moreover, the total potential of Thar is estimated at 175 billion tons of lignite coal which may be sufficient to produce 100,000 MW electricity for 200 years
NPERA has already announced Upfront Tariff for Indigenous Coal based Projects
Investors are encouraged to participate as equity partner with existing Sponsors in development of power projects based on Thar Coal and/ or propose new projects based on Thar Coal. 10 10 10

11. INVESTMENT INITIATIVES (Transmission Line Projects)
Transmission Line and Allied Infrastructure Projects under the proposed Transmission Line Policy (to be announced shortly)
List of Transmission System projects to be offered to Private Sector will be prepared by GOP
Award of Projects through ICB and Upfront Tariff on BOOT basis
Policy to cover Transmission Line & Grid Station projects of 220 kV voltage level and above (EHVAC & HVDC)
Land & Legal Right of way to be provided by NTDC
Project Term: 25 years
Transmission utility (NTDC) to pay a fixed Transmission Service Charge, regardless of the quantum of energy transmitted
Exemption from Corporate Income Tax for first ten years including turnover rate tax and withholding tax on imports
Standardized Security Package (IA & TSA)
One Window facility by PPIB 11 11 11

12. NEW INVESTMENT INITIATIVES
(RLNG Projects)
3,600 (3 x 1200) MW Power Generation Projects based on R-LNG, to be commissioned 2400 MW open cycle by May 2017; completion of MW early 2018
Tendering for all plants has been completed and contractors have mobilized
02 projects being developed by Federal government while 01 by government of Punjab
Equity participation in these plants is available for Russian investors
02 similar projects have been initiated at Jamshoro (600 MW) and Guddu (1200 MW)
These 02 plants can be implemented on G-to-G basis with Russian companies 12 12 12

13. Renewable Energy Policy 2006
No customs duty or sales tax on import of equipment
No Income Tax / withholding tax / turnover tax
Repatriation of Equity along with dividends freely allowed
Convertibility of PKR into USD
Non-Muslims and non-residents exempted from payment of Zakat on dividends
Mandatory purchase of electricity by power purchaser
17-18% ROE
Government’s Sovereign Guarantee
Grid evacuation responsibility of power purchaser

14. Renewable Energy Projects
Wind Energy
Five (05) wind power projects of MW operational.
Nine (09) wind power projects of 477 MW are under construction.
14 wind projects of 664 MW in different stages of development.
Solar Energy
One (01) solar project of 100 MW installed.
Three (03) solar projects of 300 MW under construction.
31 solar projects of MW in different stages of development.
Biomass Energy
Three (03) biomass cogeneration projects of 82.7 MW operational.
Eleven (11) biomass cogeneration projects of MW in development stages.

15. Renewable Energy Potential
Wind: 340,000 MW (Theoretical)*
1396 MW in pipeline
Solar: 2,900,000 MW (Theoretical)*
Hydro (small/mini) 3,000 MW (Approx.)
Bagasse Cogen: 2,000 MW (Approx.)
Waste to Energy: 1,000 MW (Approx.)
Geothermal Potential yet to be determined
Alternative Fuels Potential being determined
Initial macro level resource maps for wind and solar developed by NREL (USA).
Resource mapping and spatial planning of solar , wind and biomass energy resources has been initiated with the support of the World Bank and ESMAP’s Renewable Energy Resource Mapping Initiative.
* Based on NREL study conducted in 2006. 15

16. . GEOTHERMAL SPRINGS OF PAKISTAN Dassu area Skardu district
T: max: 71 °C
Murtazabad
T: °C
Budelas
T: °C
Geothermal spring
Near the snout of Pechus
Glacier
Yasin District
Hot Sulphourus spring
Geothermal springs located
Within Reshun and Ayun
fault domain
Mushkin geothermal spring
T: 57 °C
Tatta Pani geothermal spring
T: 65, °C
Bakkur thermal spring
Taunsa thermal spring
Zinda Pir thermal spring
Uch thermal spring
Khashkeli thermal gradient
3-3,5 °C/100 m
Mangho Pir geothermal spring
T: 50,3 °C
Karsaz geothermal spring
T: 39 °C
Talhar thermal gradient
Lakhra thermal gradient
3,3 °C/100 m
Koh-e Sultan thermal springs
T: 25,6 – 34,8 °C
Garm ab thermal spring
Kharan region (potential)
geothermal system
Geothermal springs at
West of Dhadar, near Sanni
Geothermal springs at the north
of Zhob valley
Harnai valley
Giandari Hot Spot
GEOTHERMAL SPRINGS
OF PAKISTAN
Seismo-Tectonic & Suture Related Systems
Geopressurised Geothermal Systems
Neogene-Quaternary volcanism related Systems

18. Hydel Power Potential Project Under Study
Diamir Basha Dam Project (4500 MW)
Patan Hydropower Project (2300 MW)
Thakot Hydropower Project (4000 MW)
Future Projects
Yulbo Hydropower Project (2800 MW)
Tangus Hydropower Project (2200 MW)
Skardu Hydropower Project (1200 MW)

19. Thar Desert contains the world’s 7th largest coal reserves:
Coal Potential of Pakistan
Thar
Sindh
186 billion tons
Punjab
235 million tons
Balochistan
217 million tons KP
90 million tons
Azad Kashmir
9 million tons
Thar Desert contains the world’s 7th largest coal reserves:
175 Billion Ton = Billion TOE = 2000 TCF
Total Thar Coal Reserve More than Saudi Arabia times higher than
& Iranian Oil Reserves Pakistan’s total gas reserves 19

20. Fiscal Incentives for Coal Projects
Thar Coalfield is declared as Special Economic Zone, and projects of development of Thar declared as ‘Projects of National Security’
20% ($ Based) IRR to firms which achieve Financial Close before Dec 2015 for Mine & Power Plants based on indigenous coal.
Zero percent customs duties on import of coal mining equipment and machinery including vehicles for site use.
Exemption on withholding tax on dividend for initial 30 years.
Exemption on withholding tax on procurement of goods and services during project construction and operations.
Exemption for 30 years on other levies including special excise duty, federal excise duty, WPPF and WWF.

21. Power evacuation from 1320 MW Hubco Project
Scope of Work
500 kV Double Circuit Transmission Line from Hubco Coal Power Plant to Matiari (200km).
Extension at 500 kV Matiari Switching Station (Two line bays with Shunt Reactor Banks)
Estimated EPC Cost
134MUS$
Expected Commissioning of Power Plant
December 2017
Financing
Financing will be done through IFIs
PC-I Approval Status
PC-I submitted to MoW&P on and is under process with Planning Commission for approval of ECNEC
Completion

22. Power Evacuation from Thar Power Plants
Scope of Work
+ 600 kV Bi-Polar HVDC T/L from Thar to Lahore (960km)
HVDC Converter & Switching /Control Stations at Thar & Lahore
Grounding Stations at Thar and Lahore
Estimated EPC Cost
1700 MUS$
Financing
Financing will be done through IFIs
Approval Status
Not yet prepared
Completion

24. Pakistan’s Power Sector is Ready For Investments in:
Generation
Transmission through wheeling
Transmission Lines
Distribution – through Privatisation
Equipment and Materials

25. Investors are welcome to avail investor friendly profitable business opportunities in Pakistan’s Power Sector 25 25 25