The World Bank has pushed back the completion date of the Sindh Solar Energy Project (SSEP) from September 2023 to July 2025, citing insufficient implementation of the project approved in 2022.
The project has been considerably delayed due to a two-year delay in selecting a full-time Project Management Unit (PMU), the impact of Covid-19, the 2022 floods, and the PMU’s limited capacity.
In light of the project’s delayed execution, the current project implementation report states that an extension to the project’s closing date is required to allow the project to accomplish its stated development objectives. The extension will allow the PMU to quickly renew existing contracts, avoiding further delays and problems.
The project’s development goal is to boost solar power generation and access to electricity in Sindh. The International Development Association, the World Bank’s soft-loan window, sanctioned $100 million for the project, of which $21.79 million has already been spent.
The World Bank reconfigured the project in response to the Economic Affairs Division’s request in March of this year to extend the project’s completion deadline by 22 months. The implementing agency, the Sindh government’s Energy Department, has prepared a revised PC-1, which reflects the requested project close extension and also proposes a reallocation of funds between components, project design changes, and the inclusion of incremental operational costs in the financing agreement.
The changes will require a Level 1 restructuring, which will be initiated once the implementing agency has the final version of the PC-1 duly approved and minuted. The revised PC-1 was cleared by Ecnec last week. The agreed changes are expected to be incorporated by the client and formally communicated to the World Bank.
The solar project aims to support the deployment of solar power in Sindh spanning three market segments: utility-scale, distributed generation, and at the household level. Public funding would be used to leverage private sector investment and expertise in the three segments, with an emphasis on long-term sustainability, developing domestic solar photo-voltaic experience, and the emergence of self-sustaining markets.
A series of solar parks under the initiative will leverage private sector development of up to 400MW of solar photovoltaic through competitive bidding, beginning with a 50MW prototype project. The project entails installing 20MW of distributed photovoltaic systems on rooftops and other accessible spaces on and around public sector buildings in Karachi and Hyderabad.
The project will scale up commercial solar solution providers’ provision of solar home systems in areas with limited access to electricity, reaching 200,000 households, or 1.2 million people, as well as a variety of capacity-building and technical assistance activities to support the project’s design and implementation.
The project is intended to assist Pakistan in moving towards a lower-carbon growth path.
Sindh has made moderate progress in renewable energy development, with wind development dominating and solar photovoltaic development dominating in Punjab. Until 2016, the National Electric Generation Regulatory Authority (Nepra) granted an upfront tariff for solar and wind generation, which was equal to a feed-in tariff; however, in 2017, the regulator declared that future solar and wind projects would be awarded tariffs through competitive bidding. So far, no solar or wind capacity auctions have taken place.
