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Time to tap KP’s 30,000 MW hydropower potential for sustainable economic, industrial growth

Naturally blessed with enormous hydropower resources, Khyber Pakhtunkhwa is a unique province where 30,000 Megawatt (MW) of hydropower potential has been identified that could easily meet the energy demands of domestic, agriculture and industrial sectors besides making Pakistan energy surplus.

Out of 30,000 MW hydropower potential identified by the KP Energy Department, only 6,000 MW (33,000 Gigawatt hours (GWh) having generation cost of Rs63 billion) has been generated so far and approximately 10,000 MW is in different stages of implementation with potential to generate about Rs100 billion revenue annually whereas 14,000 MW still remain untapped due to which the country is facing problem of load-shedding.

 Muhammad Zubair Khan, Secretary Energy and Power KP said ,” Currently the province contributes about 2,800MW to national grid, adding the energy demand of the province stands at 1,800MW and we are currently facing a shortfall of 500 MW.” 

He says if the due share of 1000 MW is provided to KP the load-shedding issue could be addressed as well as the province would become self-sufficient in meeting the domestic, agricultural and industrial demands.

The Secretary said unfortunately KP could not realize its full economic and industrial potential, which should be estimated 16pc as compared to other province, mainly due to its geographic location, adding KP Government was determined to offset this locational disadvantage by expeditious development of energy resources and providing inexpensive electricity and gas to industrial sector to keep the economic and industrial wheel moving fast.

To revive the economy, increase revenue generation and create employment opportunities, he said the KP Government had undertaken key initiatives including institutional and policy reforms, safeguarding provincial rights, ensuring commercial and financial stability, mainstreaming of merged areas and development of oil and gas sector in last two years in the province, yielding positive results.

“We have introduced first-ever successful Auction and Wheeling of Power Model for 18MW Pehur hydroelectric station on June 5, 2020 to supply cheap electricity at strike price rate of Rs7.5 per kwh to five industrial consumers to offset the locational disadvantage faced by industrial sector of KP,” he said. 

“This model would help contribute about Rs305.38 million per annum to provincial kitty, which is Rs146.57 million per annum more than sale of electricity to national grid,” he informed. 

Following successful launch of Phase-I of the Wheeling Model, he said KP Government had initiated Phase-II, which entails supply of 148MW from Machai, Malakand-III, Ranolia, Daral Khwar, Karora and Jabori hydropower projects (HPPs) to industrial consumers of the province, “Till date, over 66 industries have applied for this facility in phase-II,” he said. 

The Secretary said work on 496MW Lower Spat Gah HHP has been initiated under Public Private Partnership (PPP) with assistance of Korea Hydro and Nuclear Power Company (KHNP) whereas International Finance Corporation (IFC), a sister organization of World Bank Group, had been engaged for transaction advisory services to help assist Pakhtunkhwa Energy Development Organization (PEDO) for arranging necessary financing for development of HPPs under PPP mode.

 Similarly, 300 MW Balakot HPP worth Rs 88 billion started with collaboration of Asian Development Bank (ADB) is at advanced stage of implementation and is expected to generate Rs1.3billion revenue per year besides creating 1,000 direct jobs for youth. 

Two HPPs namely 88MW Gabral Kalam and 157 MW Madyn in Swat were being executed with assistance of World Bank costing Rs 142 billion, he said adding World Bank would provide US $ 450 million while KP Govt would contribute US $ 151 million besides US $ 185 million to be arranged through commercial financing would be raised by World Bank. It is expected that Rs10 billion revenue would be generated from these two mega projects besides feasibility studies for 10 HPP sites would also be conducted.

 Similarly, construction work on 10.5MW Chapri Charkhel HPP in Kurram district worth Rs4.378 billion having generation capacity of 73.56GHW and Rs838.41 million annual revenue, have been started besides mini macro schemes worth Rs838 million having about 3,000 KW generation capacity in merged districts are in various stages of implementation.  

 The Secretary said KP Govt was engaged with UK Foreign Commonwealth and Development Office (FCDO) through Sustainable Energy and Economic Development Program (SEEDP) under which technical assistance would be provided for innovative financial solutions, energy business plan, auction and wheeling management and transaction advisory services to IPP projects besides resolving tariff issues.

 Malik Luquman, Chief Planning Officer (CPO), Energy and Power Department told APP that Prime Minister’s Access to Clean Energy Investment Program (PM ACENIP)’ worth rupees 18 billion had been initiated with financial assistance of Asian Development Bank (ADB) under which 1,028 mini macro HPPs are being constructed in two phases in northern districts of the province. 

PM ACENIP’s Phase-I would be completed in the current financial year wherein out of 332 mini macro power projects of about 32 MW capacity as announced by PM Imran Khan as Chairman PTI in 2014, he said, 311 such projects were completed so far and the rest would be completed by June this year.

Work on Phase-II to construct 672 mini macro HHP having capacity 53MW has already been initiated that will be completed by 2023. Under PM ACENIP, he said, a project costing Rs4347 million having 12 MW capacity was launched with assistance of ADB for solarization of 8,000 schools and 187 BHUs in the province. 

“The aggregate power generation capacity of these solorization schemes was 2.85 MW with accumulative savings of 5.6 million energy units per year with Rs 88 million annual savings.  Civil and Chief Minister Secretariats and CM KP House were converted to solar energy through net metering mechanism besides solarization of 5,700 households and 300 mosques in the province. 

Himayatullah Khan Mayar, Advisor to the Chief Minister for Energy and Power said 18 projects had been approved for merged areas where up-gradation and installation of feeders, rehabilitation of grid stations and installation of transformers in industrial zones would be achieved with Rs 6.8 billion cost to address problem of load shedding and facilitate industrial units manifolds.

 With completion of these projects, he said overloading on 11 KV lines, 132 KV transmission lines and grid stations would be significantly reduced and electrification facilities to additional 18pc population of merged areas would be provided. 

The CM aide said Rs35.5billion Accelerated Implementation Program (AIP) including Rs 20.5 billion for oil and gas exploration in eight blocks to be invested by KP Oil and Gas Development Company Limited (KPOGDCL), would be achieved in next three years.

Similarly, Rs15 billion investment plan for next 10 years, which would be funded from Oil and Gas Royalty, were approved for merged and settled districts of the province having an expected revenue of Rs13 billion and generation of over 2,000 jobs for locals. Five years Kohat Area Development Program (KADP) had been approved that would be executed with financial assistance of UNDP in Kohat Division under Gas Royalty’s share and was handed over to the Planning and Development Department KP for speedy implementation.

Under KADP, he said eight small dams, rehabilitation of eight existing irrigation and 100 rural roads schemes, operationalization of 39 existing water schemes, provision of missing facilities for 135 girls primary schools and 65 BHUs would be achieved. 

He said Federal Govt had approved Rs11 billion for gasification schemes for Karak, Kohat, Hangu, Peshawar and Charsadda districts  that would help provide gas to over 8,000 households including four lakh individuals and address low gas pressure problems in Peshawar and Charsaddda districts. “KP Govt has agreed to provide Rs 4.7 billion for this mega project and already paid its due share of Rs850 million to SNGPL for early completion of these gas projects in these districts.

  The natural gas has been discovered at Dhok Husain Well-I in Karak, injecting 15MMCFD  gas to the national pool.”   For the first time, he said KP Govt had taken up issue of representation in Board of Directors of important federal entities including PESCO, NTDC, CPPA-G, AEDB, OGDCL, PPL, SNGPL, PSO, PPPIB, GHPL etc with Federal Government and was succeeded to get representation in SNGPL, GHPL and OGDCL while efforts were underway to get access to remaining boards to protect the province’s interest.
 The CM aide said the 10- year long issue of signing of pending energy purchase agreements (EPAs) were resolved and EPAs were signed in May 2019 for 18 MW Pehur, 17MW Ranolia and 36.6 MW Daral Khwar HPPs, having the potential to generate Rs2.1 billion per year for the provincial kitty. 

The previous PTI Govt has succeeded to uncap Net Hydel Power Profits (NHP) of Rs six billion per year to Rs18.7 billion annually with five percent indexation for financial year 2015-16 while Chief Minister Mahmood Khan was able to convince Common of Council Interest (CCI) on Rs128 billion for financial year 2016-17 under AGN Qazi formula. In addition to reconstruction of Oil and Gas Company, establishment of LPG Marketing Department at KPOGCL, increasing efficiency of Electric Inspectorate, restructuring of PEDO, establishment of KP Transmission and Grid Company (KPTGC), strengthening of Energy and Power Department, KP Transmission and Grid Company have been achieved. 

Likewise, a state-of-the art Institute of Petroleum Technology (IPT) was being established in Karak district under PSDP with a cost of Rs2 billion. Besides generation of Rs168.9 billion revenue including Rs87.602 billion during 2018-19 and Rs81.298 billion from various heads, he said an internship policy had been approved under which 50 internees would be engaged per year with provision of Rs26,000 stipend per month, adding this facility had been provided to 186 young professionals during last two years.

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