Financing agreement signed with World Bank for Sindh Solar Energy Project

ISLAMABAD, Pakistan: The government of Pakistan and the World Bank on Wednesday signed a financing agreement worth US $100.0 million for “Sindh Solar Energy Project” with the objective to increase solar power generation and access to electricity in the Sindh Province.

The Secretary at Economic Affairs Division (EAD) Noor Ahmed signed the financing agreement on behalf of the government of Pakistan while the Secretary at Energy Department, government of Sindh Musadiq Ahmed Khan signed the project agreement on behalf of the Sindh government.

The Country Director of World Bank Patchamuthu Ilangovan signed the financing and the project agreements on behalf of International Development Association (IDA).

The Secretary EAD thanked the World Bank for extending its continuous support to government of Pakistan in its efforts to achieve sustainable economic development in the Country.

The project will support the deployment of solar power in Sindh spanning three market segments: utility scale, distributed generation, and at the household level. Utility-Scale Solar includes development of solar parks to support private sector investment and launching of Pakistan’s first competitive bidding for solar power production, starting with an initial 50 MW pilot solar auction. Distributed Solar includes at least 20 MW of distributed solar PV on the rooftops and other available space on and around public sector buildings in Karachi, Hyderabad and other districts of Sindh Province. Provision of Solar Home Systems to 200,000 households in areas with low or no electricity access.

The total cost of the project is US $105.0 million. The IDA will extend financing of US $100.0 million for the project and the Sindh government will contribute US $5.0 million.

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The public funding will be used to leverage private sector investment and/or expertise in the three segments, with an emphasis on long-term sustainability, developing domestic solar PV experience, and the emergence of self-sustaining markets.

The project will introduce and showcase international best practice with renewable energy auctions, reduce the headline cost of solar deployment, create sustainable business models for potential replication, build institutional and private sector capacity, and identify opportunities for future renewable energy deployment that address issues of grid integration.

The project is designed to help steer Pakistan toward a lower-carbon path to development.