Development of Financial Model to Solarize Public Institutes in Pakistan

Abstract

Punjab is the largest province of Pakistan, constituting 53% of its population. Due to a rapidly growing load demand at 10% per year, Punjab is currently facing a substantial demand-supply gap of 5,000MWs. With two-third of the entire consumption of total generated power in Pakistan, Punjab is worst affected by the shortfall, economic and social consequences resulting from electrical load shedding. Inefficient energy industrial processes, building designs and electricity usage by consumers drives up overall and peak demand and impose great stress on the available energy supply. Acknowledging the issue, the provincial government of Punjab established the Punjab Energy Conservation and Energy Efficiency Agency (PEECA) in 2015, to promote, develop and implement energy efficiency (EE) projects and policies at the provincial level. To continue widening the scope and increase the scale of Energy Efficiency projects in Punjab, other than direct funding from the Government, monetary investment from other entities such as state enterprise and private investors is instrumental. However, various challenges exist in attracting private investors to invest in EE related projects. In order to have a complete understanding of the challenges involved, questionnaires were issued to various stakeholders such as Multi-Laterals, Power Distribution Companies (DISCOs) and Energy Service Companies (ESCOs) in consultation with the client (PEECA). From the responses, regulatory issues, bureaucratic delays and lack of awareness of EE among the investors and community were some of the factors highlighted. Considering the issue from a holistic perspective, the team reviewed various investment models in the energy efficiency sector from the developing and developed world and proposed two refined investment models, taking into account the factors highlighted in the questionnaire and addressing the political, social and environmental issues involved. The team believes that the policy proposal will help PEECA manage the demand side of electricity more effectively and help reduce the consumption of fossil fuels, and GHG emissions. This will encourage the people of Punjab to live within the finite resources of earth and act as a form of stewardship towards future generations. It will further improve the lives of millions since climate change is the cause of frequent floods in Pakistan and damages are caused due to this calamity.