BEGINNING OF WIND POWER GENERATION

FAUJI FERTILIZERS INITIATIVE OF 50MW WIND POWER PLANT AT JHIMPIR

INTERVIEW: LT. GEN NAEEM KHALID LODHI, HI (M) RETIRED), CEO & MANAGING DIRECTOR FAUJI FERTILIZER COMPANY

AMANULLAH BASHAR
(feedback@pgeconomist.com)

Sep 24 - 30, 20
12

It is now a matter of switching the button to allow country's first wind power project to go into generation to produce 50mw of electricity and put into the national grid hopefully in October 2012, said Lt.Gen. Naeem Khalid Lodhi, the Chief Executive of the project in an interview.

Explaining various features of the project located at Jhimpir some adjacent to Thatta in Sindh Gen. Liodhi said with a great deal of confidence that the project is ready and if things go well with the end users, Fauji Fertilizer has a plan to expand the generation capacity designed to generate 200 mw going forward.

Gen. Lodhi who is also the Chief of Fauji Fertilizer Company, which is of course the most prestigious corporate entity in terms of outstanding performance and an outstanding contributor to the national exchequer besides providing the sustainable support to the agriculture sector, said that realizing the fact that persistent shortage of electricity has adversely affected the economic growth, FFC decided to play its role in addressing the energy crisis and set up the first wind power project with the support and assistance of the federal and the provincial government of Sindh that enabled us to set up this project at a cost of $134 million financed by the company as well as the banking sector in Pakistan.

The power purchase agreement has been signed successful, although he declined to give details of the purchase power agreement with National Transmission and Distribution Company yet indicated that finally the tariff would be settled around 14 cent per kWh for a period of ten years.

In fact this project has marked the beginning of an era of renewable energy in Pakistan as the national economy cannot afford to put up with ever increasing cost of fuel oil and the situation has left no option but to tap all available domestic resources to beat the heat and hike of energy price. Even the development economy of the world has already switched over from oil to renewable energy resources to remain alive in the export market.

PAGE: WOULD YOU LIKE TO SHARE THE BACKGROUND OF THE DECISION TO SET UP A WIND POWER WHILE YOUR COMPANY I.E. FAUJI FERTILIZER WAS ALREADY DOING QUITE WELL AND IS KNOWN FOR THE STELLAR GROWTH IT HAS ACHIEVED OVER THE YEARS?

GEN. LODHI: Actually this wind power project came into being in pursuance of the vision of business diversification Fauji Fertilizer Company (FFC) that ventured into the energy sector by incorporation of FFC Energy Limited, (FFCEL) on 18 November 2009 . FFC Energy Limited (FFCEL) is a special purpose public limited company which has been established and set up under the laws of Pakistan and is incorporated under the Companies Ordinance 1984. It is a subsidiary of Fauji Fertilizer Company Ltd. which is one of the biggest names in Pakistan's corporate sector for decades, and is the largest fertilizer producer in Pakistan with 48% of the urea market share in the country.

PAGE: HAVE YOU SET UP SUCH A NEW VENTURE BY YOU SELF OR IT WAS DONE WITH THE TECHNICAL SUPPORT AND EXPERTISE FROM OUTSIDE PAKISTAN?

GEN LODHI: The Company signed contracts of Engineering, Procurement and Construction (EPC) and Operations and Maintenance (O&M) with Nordex of Germany and Descon Engineering in February 2010. Nordex is one of the leading manufacturers of Wind Turbines in the world and has over 4000 Nordex Wind Turbines with a total rated output of 5720 MW already operating in 34 countries of the world. FFCEL has acquired the tariff approval from NEPRA and In June 2011 became Pakistan's first wind power electricity generation company to achieve Financial Close. This Fast Track Project shall provide cleaner and sustainable energy and will help address electricity shortage in the country.

All civil, mechanical & electrical construction works including erection of 33 Wind Turbines have been completed. 80% of turbine towers were manufactured locally - first time in the country at Descon's workshop in Karachi. Now the project has entered into the last phase of commissioning. The project, once operational will be country's 1st 'Complete Project' of this magnitude in the field of grid connected renewable energy project in general and Wind Power in particular.

PAGE: ALTHOUGH THE FIRST WIND POWER PROJECT LOOKS IMPRESSIVE AND CERTAINLY A VALUABLE ADDITION IN THE NATIONAL GRID WHICH IS CONFRONTED WITH ACUTE POWER SHORTAGE, HOWEVER A MERE 50 MW ARE NOT GOING TO GIVE NOTICEABLE RELIEF TO THE ENERGY STARVED NATION?

GEN LODHI: You are right and that is why FFC has planned to expand the project capacity to the level of 200mw going forward and we are already in negotiations with the ministry of power and hopefully

If things moved in the right direction with all relevant ministries and government organizations we would certainly expand our production. Besides wind power we were also thinking to enter into solar energy which has now become affordable and have a significant role in the days to come.

PAGE: YOUR PROJECT HAS OCCUPIED A HUGE PIECE OF LAND IN JHIMPIR WHICH IS COMPARATIVELY A LESS DEVELOPED AREA IN SINDH, HOW THIS PROJECT WOULD BE BENEFICIAL FOR THE LOCAL POPULATION?

GEN, LODHI: The management is fully aware of the plight and problems faced by the local population due to lack of economic opportunities, however we have chalked out an extensive social development program for the people of the area under the Corporate Social Responsibility plans. We are in talks with the local population for providing them potable water, basic education facility to their children and health care and initially one lakh dollars have been allocated for this purpose.

PAGE: FAUJI FERTILIZER PRODUCING AROUND 2.7 MILLION TONS OF UREA WHICH IS A MAJOR CONTRIBUTION TO AGRICULTURE ECONOMY HAS THE GOVERNMENT HAS TO SPEND HUGE FOREIGN EXCHANGE ON IMPORT OF UREA BECAUSE FOUR MAJOR UREA UNITS ARE CLOSED FOR WANT OF NATURAL GAS SUPPLIES. HOW FFC MANAGED TO GET GAS SUPPLIES WHILE OTHER UNITS WERE STOPPED SUPPLY OF GAS?

GEN. LODHI: With a noticeable smile on his face said that the management of FFC was smart enough and had entered into an gas supply agreement directly with gas producing companies for direct supply from gas field instead getting gas supplies from distributing companies like SSGC OR SNGPL and now other fertilizer companies were also following into foot prints of FFC and making efforts forgetting direct supplies from the gas fields.