ISLAMABAD: The National Electric Power Regulatory Authority (Nepra) hasshown ‘special kindness’ to Turkish company M/s Zorlu Solar PakistanLimited (ZSPL) by approving 13 percent Return on Equity (RoE), afterintervention of the Prime Minister who apologized publicly to the Turkishcompanies for mistreatment in the past.
The company intends to establish 100MWp solar power project at Quaid-e-AzamSolar Power Park (Extension), Lal Sohanra, District Bahawalpur, Punjab.Turkish company had complained of ill-treatment during the PTI government.
During the hearing, the petitioner submitted that while consideringPakistan’s 10-year government bonds as risk-free rate, 14% RoE is alreadyon the lower side. Additionally, the petitioner during the hearingemphasized that the indexation of RoE due to change in exchange rates, beallowed on quarterly basis as against on annual basis, as approved by theAuthority in the tariff case of Siachen Energy.
ZSPL said that with annual indexation, the company shall be exposed to therisk of PKR devaluation for one year, which actually decreases the RoE tothe level below 10 (considering 20% devaluation).
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Additionally, if the factor of delayed payments by CPPA-G is considered,then the RoE reduced to 7-8%. ZSPL stated that this arrangement shall notbe acceptable to the lenders and resultantly the project shall not remainbankable.
According to determination, the Authority noted that in two most recentcomparable cases of renewable technologies, the RoE of 12% has beenapproved by the Nepra.
