• The basis for selection of private power project will be the minimum levelized tariff either through International Competitive Bidding (ICB) for solicited proposals or through negotiations / ICB for proposals on raw sites.
• Without a proper feasibility study for a particular site-specific hydel or indigenous fuel based/ renewable resource based project, it will not be possible to invite competitive bids and receive firm offers.
• Hydel projects will be implemented on Build-Own-Operate-Transfer (BOOT) basis.
• Thermal projects would either be built on BOOT or Build-Own-Operate (BOO) basis.
• Private power companies will be allowed to import plant and equipment (for hydel & thermal projects), not manufactured locally at concessional rates (i.e. 5%) of duty. They are exempt from the payment of income tax, turnover rate tax & withholding tax.

INCENTIVES IN POWER POLICY 2002

• Complete security and guarantee regarding political risk, change in taxes/ duties, transfer of money and contracts with WAPDA, KESC, Provincial and AJK governments.
• Pakistan needs 5,529 Mega Watt (MW) power additional by 2009-2010.
• Policy to discourage thermal power generation and bulk supply tariff is not fixed as was in 1994. Government has learnt lesson from previous policies i.e. no up-front fixed capacity charge for thermal power plants, limitation on front-end loading, and one window operation.
• Special incentives for coal/ gas fired projects and hydel projects. Integrated coal mining and power, secured return on investment made on dedicated coal/gas resource for power generation and investment made in integrated projects to be recovered from tariff under coal and gas projects. Hydrological risk to be borne by WAPDA, priority dispatch with economic load dispatch criteria under hydel projects are the key features.
• Under the pre-qualification criteria, main sponsors to have a 20 percent stake in equity and together with other partners will have direct and relevant experience in development or implementation or ownership or operation in similar projects; demonstrated capability for financing (equity & debt) and main sponsors not to own more than 25 per cent of total generation.

for more information visit : www.pakboi.gov.pk