Scatec Solar and Nizam Energy have announced the signing of an agreement to invest US$300 million to jointly develop 150 MW of solar power plants in Pakistan.
The agreement consists of the development of three 50 MW photovoltaic (PV) plants, to be located in Sindh province, on a Build-Own-Operate basis. The total generating capacity of 150 MW will be able to power roughly 150,000 homes during peak daytime hours.
The project represents an initial investment of almost US$300 million, with an additional 150 MW planned to be developed in a second stage, bringing the total investment to nearly US$600 million.
The development and financing of the 150 MW of solar PV plants is expected to be completed towards the end of 2015, with construction starting in Q1 2016. The project is predicted to be completed in about a year.
Pakistan's Central Power Purchasing Agency (CPPA) will purchase the electricity generated by the joint venture for a duration of 25 years and will receive 50% of the revenues from Carbon Credits generated by the project.
From the 150 MW solar plants, an estimated 290 GWh of electricity will be added to the grid per year, which will rise to roughly 580 GWh when the second stage is completed.
Scatec Solar will also be responsible for the financing, turnkey construction, operation and maintenance of the projects. Nizam Energy will be the local co-developer, co-investor and a potential sub-contractor during the construction and operation phases.
Raymond Carlsen, CEO of Scatec Solar, has commented:
"This project is an important landmark in Scatec Solar's journey to provide clean and affordable energy in developing countries. The Pakistani authorities have shown their commitment to addressing the nation's rising energy demand. Access to energy is a prerequisite to improve standard of living. We are keen to increase the role of clean solar power in Pakistan's energy mix."
Pakistan faces an acute energy crisis. Electricity shortfall has exceeded 7 GW, which is about one-third of peak demand during extreme periods. If this energy deficit is addressed, experts say, Pakistan could increase its GDP by as much as 2% annually through additional production, exports and employment.