Pakistan Regulator Seeks Approval of Feed-in Tariffs for Wind

NEPRA has proposed a novel two-tier system of tariffs depending upon ownership. Pakistan will pay foreign wind developers less than domestically-owned companies.

If the proposed tariffs are approved by the Ministry, Pakistan would leap ahead of any feed-in tariff proposal for wind energy in North America. The targeted wind capacity of 1,500 MW is alone significant. Possibly more significant, however, the proposed tariffs are not simply fixed at one single price for 20 years. Instead the Pakistani tariffs are differentiated by decade. For example, the tariffs during years eleven through twenty are half those during the first ten years of the contract. Payment in this manner approximates repayment of debt and equity during the first decade. After debt retirement, the tariff can be substantially reduced while still maintaining the desired return on equity sufficient to attract investment.

• Project size: >5 MW<250 MW.
• Program is open only to the end of 2012 and limited to a total of 1,500 MW.
• Financing must be closed 12 months after contract is awarded and projects must also be completed within 18 months.

National Electric Power Regulatory Authority Up-front Tariffs for Wind Energy