Scatec Solar partners with Nizam Energy on $300m Pakistan PV project

Norwegian solar power producer Scatec Solar has entered into a development agreement with Karachi, Pakistan-based EPC Nizam Energy to create a 150 MW portfolio of PV power plants in Pakistan.

The $300 million deal was signed this week in Oslo, on the occasion of Pakistan Prime Minister Nawaz Sharif’s visit to the Norwegian capital, where he met with Norwegian Prime Minister Ms. Erna Solberg.

Financing and development plans are to be thrashed out before the end of the year, with construction penciled to begin in Q1 2016. The first $300 million phase of the project will comprise three individual 50 MW solar farms located in Pakistan’s Sindh province. The second phase will add a further 150 MW of solar PV capacity to the region, bringing the total investment to around $600 million.

Scatec Solar’s role in the plan is to jointly work with Nizam Energy on the construction and operation of the solar plant, with the Norwegians placing a keen emphasis on “transferring technical expertise to the local community”, Scatec Solar confirmed. The construction phase will bring 1,000 much-needed jobs to the region, with 60 permanent posts created thereafter.

"This project is an important landmark in Scatec Solar’s journey to provide clean and affordable energy in developing countries," said Scatec Solar CEO Raymond Carlsen, who signed the agreement alongside his counterpart from Nizam Energy, CEO Usman Ahmad. "The Pakistani authorities have shown their commitment to addressing the nation’s rising energy demand."

Ahmad added that access to energy is a prerequisite to improving the standard of living of many thousands of Pakistanis, stressing: "We are keen to increase the role of clean solar power in Pakistan’s energy mix."

Once completed, it is estimated that this solar project will mitigate the effects of 300,000 tons of C02. Pakistan’s Central Power Purchasing Agency (CPPA) has agreed a 25-year PPA for the plant’s energy, and will receive 50% of the revenues from Carbon Credits that are generated by the project.

With Pakistan’s acute energy shortfall amounting to 7 GW annually – one-third of peak demand – the need for clean, affordable and reliable power is stark. By plugging this energy gap, Pakistan could add around 2% to its annual GDP, according to the government.

Scatec Solar is to finance the solar project, as well as work on turnkey construction, operation, and maintenance, while Nizam Energy will act as co-developer, co-investor and potential sub-contractor.

Pakistan’s solar sector has been boosted by Prime Minister Sharif’s tenure, not least in the form of the 1 GW Quaid- e Azam Solar Park, the first 100 MW of which is already connected.