Provital consortium offers $1 billion soft loan

 Apr 04 - 10, 2005

Karachi which is the largest power consuming city of Pakistan has to rely on various means to meet out its electricity requirements due to adequate power generating capacity of Karachi Electric Supply Corporation (KESC).

Despite having an installed power generating capacity to the tune of 17500mw, its outmoded and outlived generators hardly produce around 1000mw of power leaving a yawning gap of over 1000mw. The utility company which was so far running under the cap of public sector entity, had to bridge the yawning gap between demand and supply through purchase of power from two small Independent Power Producers (IPPs) working in its franchised area, WAPDA and other resources in bits and pieces. The shortfall in power generation was due to policy of the government which had disallowed the corporation to enhance its generation capacity. The decision to cap power generation was probably imposed on KESC in view of the government plan to privatize this almost a sick unit to get rid of its liabilities of injecting huge funds every year in the budget.

However, the situation is bound to take a new turn in the power generating sector especially after privatization of the KESC. Though the new management would be free to expand its power generating capacity or reinforce its supplies by purchasing power from other producers.

With this background of acute power shortfall and growing demand for power in the days to come especially after remarkable growth being demonstrated by the large scale manufacturing, this industrial and commercial hub of Pakistan has become a point of attraction for the international investors in power generating sector.

Besides the existing IPPs namely Gul Ahmed and Tapal Energy, various international players in the energy sector have approached the authorities of investment in the power generating sector. Tapal and Gul each producing 126 and 124mw of power and were also striving to expand their operations to almost double of the capacity of their power plants. They have been granted permission to expand yet the sustainable supply of gas to run their plant is one of the major irritants to go ahead with their plans.

Since the fuel oil has become too costly to produce power, the government has almost put a ban on oil-fired system of power generation while the growing demand of natural gas has also started creating scarcity of the indigenized natural gas.

Under the prevailing circumstance, people have started finding alternative energy resources. Since hydro power generation was out of question in Karachi, experts in the alternative energy resources were of the view that wind which is available round the year in Karachi can be the best option to generate wind power, which requires no fuel for running the power generators.

In order to ascertain the viability of wind power project, a Denmark-based company conducted studies on various locations in Karachi including at Port Qasim, Keamari, Mannora and West Wharf for installation of wind power plants.

After conducting successful surveys, Provital Consortium has signed agreements with the city government, Karachi Port Trust to install wind power plants at Mannora and Port Qasim. These plants besides generating electricity would also produce potable water after desalination of the sea water. This would be a two-pronged project and if goes into operation would lend a helping hand in resolving the water and power issues of this electricity starved city of Pakistan.

Provital Consortium, currently involved in desalination and wind power production around the world, has offered to set up wind power and desalination plants at the strategic locations in Pakistan.

Shakeel Neimat, President of Norddicom International, originally a Pakistani firm based in Denmark for the last 30 years, in collaboration with Provital Consortium, has offered to set up sustainable wind hybrid power and sea water desalination plants alongwith a one billion dollar loan on soft terms to Pakistan.

In this respect, an agreement has also been signed with the City Government Chief Naimatullah Khan, disclosed Shakeel.

This two-pronged project would meet the current and future needs of Pakistan's water and energy requirements sufficiently, besides beating the sky rocketing prices of fuel oil to generate electricity.

Elaborating the project detail, he said that the plant will be implemented with a land lease concession from Karachi Port Trust and will be situated in the Mannora Island, Keamari at Karachi shore.

Shakeel said that water production coming out of this plant is more than KPT's requirement so therefore the surplus water will be supplied to City Government and the Karachi Water & Sewerage Board.

Giving the reference projects carried out by the consortium elsewhere in the world, Shakeel said that Provital was selected as the private consultant to the government of Azerbaijan by the United Nations. The consortium has devised methods for rapid water purification to provide potable water for the refugees of the local war.

The group is fully technical consultant on all energy projects under gross value of $400 million. The consortium has already approved several projects including Yambu Municipal system in Saudi Arabia, which is in excess of 50 million gallons of water per day from the sea water.