The National Electric Power Regulatory Authority (NEPRA) has authorized a tariff of Rs. 7.8 per unit for the 600 MW solar project to be installed in Muzaffargarh, subject to a few conditions including quarterly adjustment of the tariff due to changes in exchange rates.
Consumers will pay a 15 percent income tax on the income and gains of the Muzaffargarh solar project since it will be included in the benchmark tariff.
The Alternate Energy Development Board earlier requested that the 15 percent income tax be treated as a pass-through item, which NEPRA denied and pushed it past the benchmark tariff, reported TheNews.
End users will pay yearly lease rentals of 5 percent (Rs. 70 million) of the proposed cost of land (Rs. 1,400 million), resulting in a tariff impact of Rs. 0.06/kWh.
Besides the above, NEPRA has approved the Request for Proposal (RFP) documents for the government’s 600 MW solar power project. The RFP will be open for investor bids until the end of this month, after which the winner will be awarded the contract to build it.
It is pertinent to note that the German Government GIZ funded and prepared the technical feasibility of the 600 MW solar power plant. The federal government constituted a special task force under the chairmanship of Shahid K Abbasi to execute Prime Minister Shehbaz Sharif’s initiative on green energy on a fast-track basis.
The Government of Pakistan at the time wanted to transfer its electricity system to solar energy as the duration of plants run on furnace oil is expected to expire this year.
Editorial & Legal Practice Group
Authored and reviewed by the corporate law and tax litigation practice group at Javid Law Associates. Our team comprises High Court advocates, corporate legal advisors, and authorized tax practitioners across Pakistan.
Advocates High Court & Tax Counsel
Jurisdiction: Pakistan