US-China trade war – Chinese interested to relocate factories to Pakistan

on 23/08/2020

Minister for Science and Technology Fawad Chaudhry says Chinese companies are interested in the relocation of their factories to Pakistan because of the US-China trade war and believes the country is set to take a major benefit.
Flanked by Minister for Science and Technology Minister for Energy Omar Ayub Khan, Fawad Chaudhry announced the Alternative and Renewable Energy (ARE) Policy 2020 said the relocation of Chinese factories would benefit Pakistan’s manufacturing sector.
Both the ministers shared details of tax facilities offered to investors in the policy and said power plants will be inducted on open competitive bidding for lowest tariff and technology transfer.
Under the new policy, they said the government would increase the share of ARE in total power supply to 20 percent by 2025 and 30 percent by 2030.
They hoped the induction of power plants on open competitive bidding would bring down solar and wind tariffs to less than four cents per unit.
Key features of the policy:

  1. the investment would be solicited on a competitive bid for the lowest cost instead of upfront or cost-plus based tariff under all previous power policies
  2. the government would decide on the annual and three-year basis about the quantity of additional power requirement as before but it would be decided jointly by the four provinces, Azad Jammu & Kashmir and Gilgit-Baltistan at a steering committee as to how much share be allocated to solar, wind, waste to energy or other technology and what should be their location
  3. the currency devaluation factor would be taken care of in bids for tariff
  4. incentives for technology transfer for local manufacturing of solar panels, wind turbines and all related equipment for job creation for which Ministry of Science and Technology was finalising quality standards
  5. bidding would bebased on two to three year forward looking energy requirements and on take and pay basis without allowing capacity payment price to ensure that tariff is paid only for the electricity purchased and not for capacity availability
    It was unearthed in the moot that three top Chinese companies and a leading European manufacturer had approached the government for setting up of manufacturing units for solar and wind equipment.