Energy-short Pakistan moves to power up solar manufacturing

Updated 29 January 2019
0

Energy-short Pakistan moves to power up solar manufacturing

  • A new government budget bill seeks to give renewable energy manufacturers and assemblers in the country a five-year exemption from the taxes
  • Only about 5 to 6 percent of the power to Pakistan’s national electrical grid currently comes from renewable energy

ISLAMABAD: Pakistan’s government has proposed to eliminate taxes associated with manufacturing of solar and wind energy equipment in the country, in an effort to boost the production and use of renewable power and overcome power shortages.
A new government budget bill, expected to be approved in parliament within a month, would give renewable energy manufacturers and assemblers in the country a five-year exemption from the taxes.
“Pakistan is paying the heavy cost of an ongoing energy crisis prevailing for the last many years,” Finance Minister Asad Umar said last week in a budget speech.
“In this difficult time, the promotion of renewable energy resources like wind and solar has become indispensable.”
Only about 5 to 6 percent of the power to Pakistan’s national electrical grid currently comes from renewable energy, according to the country’s Alternate Energy Development Board (AEDB).
The proposed tax reduction should boost that by encouraging greater local manufacturing of equipment needed for renewable power expansion, said Asad Mahmood, a renewable energy expert with the National Energy Efficiency and Conservation Authority, which sits within the Ministry of Energy.

Remaining hurdles
But manufacturers said the tax breaks likely would not be sufficient to spur expansion of local renewable energy industries.
Naeem Siddiqui, the chairman of Ebox Systems, which assembles solar panels in Islamabad, said the new tax breaks were good news but Pakistani manufacturers would still struggle compete with tax-free, low-priced imports of foreign-built solar panels and other renewable energy equipment.
“The government has already waived off taxes and duties on the import of renewable energy products, and local manufacturers cannot compete with the low-priced imported items,” he said.
Pakistan today imports more than 95 percent of the solar panels and other renewable energy systems it uses, largely from China, said Aamir Hussain, chief executive officer of Tesla PV, one of the largest manufacturers of solar energy products in Pakistan.
“As long as the government will not impose duties on the import of finished products, the local market cannot grow,” he said.
Pakistani manufacturers also might need government help in pushing sales of new Pakistani clean energy products abroad, in order to build bigger markets and lower manufacturing costs, Siddiqui said.
Mahmood, of the energy ministry, said he believed the government would also move to cut existing duties on the import of components used in manufacturing finished renewable energy products, in order to help Pakistani manufacturers.
Taxes on those components have pushed up prices of Pakistani-made renewable energy systems, making them harder to sell and leading several companies to the brink of failure, he said.
Local manufacturers should work with the government to determine which components should be manufactured locally and which imported to ensure costs of locally made wind and solar systems are competitive, he said.
Muhammad Abdur Rahman, managing director of Innosol, a company that imports and installs renewable energy systems, said that cheap imports of renewable energy systems from China remain the main barrier to building more such systems in Pakistan.
“The local industry is facing pricing issues because of low-quality solar energy appliances being imported in the country that are very cheap as compared to the local market,” he said.
That might be resolved in part by the government starting a certification system for renewable energy products to grade them according to quality, he said.
Amjad Ali Awan, chief executive officer of the Alternate Energy Development Board, said the aim of the new policies was for renewable energy to supply 28 to 30 percent of the country’s national electrical grid by 2030.


UN compensation panel pays out $270m for Kuwait oil company

Updated 51 min 59 sec ago
0

UN compensation panel pays out $270m for Kuwait oil company

  • The panel has approved 1.5 million claims brought by over 100 governments and international organizations
  • Some $3.7 billion of its $14.7 billion claim for oil production and sales losses resulting from damage to the country’s oil fields remains to be paid

BERLIN: A United Nations panel that oversees compensation claims stemming from Iraq’s 1990-1991 invasion of Kuwait says it has paid out $270 million to Kuwait’s national oil company.
The Geneva-based UN Compensation Commission said Tuesday the tranche brings to $48.7 billion the amount it has paid out. Iraq must currently set aside 1.5% of proceeds from oil exports for the compensation fund and payments are made once per quarter.
The panel has approved 1.5 million claims brought by over 100 governments and international organizations, with all but one fully paid out.
The remaining claim, which includes the latest payment, comes from the Kuwait Petroleum Corporation. Some $3.7 billion of its $14.7 billion claim for oil production and sales losses resulting from damage to the country’s oil fields remains to be paid.