SINDH - PAKISTAN INNAUGURATES FIRST WIND FARM

UNCLAS KARACHI 000139 SENSITIVE SIPDIS E.O. 12958: N/A TAGS: ENRG EINV PGOV ECON PK SUBJECT: SINDH - PAKISTAN INNAUGURATES FIRST WIND FARM SUMMARY -------------- ¶1. (SBU) On April 19, Prime Minister Gilani officially inaugurated the Zorlu Wind Power Project, Pakistan's first wind farm. Located in Jhimpir, Sindh this commercial project is currently capable of generating 4.8 megawatts (MW) of power, but is expected to generate 300 MW by the end of 2010. End Summary. Winds of Change -------------- ¶2. (SBU) At a "Winds of Change" themed event, attended by Prime Minister Gilani, Sindh Governor Ibad, Sindh Chief Minister Shah, Federal Minister for Water and Power Ashraf, Federal Water and Power Secretary Rafi, diplomats, members of the National Assembly, members of the Provincial Assembly, and businessmen, Pakistan inaugurated its first wind power plant, on April 19. Located in Jhimpir, Thatta, Sindh, approximately 100 km (62 miles) northeast of Karachi, this commercial wind farm was hailed as a "giant leap" for Pakistan. ¶3. (U) The Zorlu Wind Power Project is on a site designed by German engineers in the Ghoro-Keti Bandar Wind Corridor. The wind corridor is 60 km wide and 170 km deep, and is believed to be capable of producing 50,000 MW of electricity. This project is the first of several planned in the area. During his address, Prime Minister Gilani announced that there are 24 other wind projects in various stages of development throughout Pakistan that will add 1200 MW of power. ¶4. (SBU) Turkish company, Zorlu Enerji, obtained the lease from the Government of Pakistan (GOP) to build and operate the plant for 20 years. The company's business plan is to recover development and construction costs within the first 10 years. The site manager told EconOff that Zorlu Enerji invested USD 100 million into the site. It took two years to build the first four wind turbines because of bureaucratic delays, according to the Pakistan Administration Manager for Zorlu Enerji. Zorlu plans to add 30 wind turbines in the next four months, which will increase the generating capability to 50 MW. By the end of 2010, Zorlu plans to generate 300MW. ¶5. (SBU) The first 6 MW of capacity is contracted to the Hyderabad Electrical Supply Company (HESCO). (Note: The fifth wind turbine will soon be operational. Once it is, the site will generate 6 MW. End note.) The project is expected to provide enough electricity for 6,900 to 7,400 homes and the initial tariff is set at USD 12.1057 cents per Kilowatt hour. While this rate is cheaper than electricity produced by oil powered plants, it is more expensive than electricity from hydroelectric or nuclear power plants. The head of the Karachi office of the Alternative Energy Development Board told Post, however, that Zorlu is expected to appeal to the government regulator for a rate increase of three or four cents, which will make the tariff on par with oil powered plants. Indications are that the tariff will decrease once Zorlu recovers its development costs in 10 years. The plant is expected to displace 10,500 tons of carbon dioxide each year. ¶6. (SBU) Prime Minister Gilani declared that this project represented a "new era" for Pakistan. He praised the wind farm as a source of "green, economical, and indigenous power". He explained that the development of alternative energy is important for Pakistan's energy security, as it will enable the country to reduce its dependence on imported fossil fuels and reduce pollution. During the event, Prime Minister Gilani also announced an Alternative Energy Fund to help finance similar projects and to build capacity. This fund will fall under the purview of the Alternative Energy Development Board. Prime Minister Gilani also reaffirmed the GOP's goal of adding enough power capacity to stop load-shedding by the end of the current year. Comment -------------- ¶7. (SBU) This event received wide media coverage and is viewed by many government and business officials as an important step in Pakistan's development of alternative energy. The timetable for the planned expansion seems ambitious, but appears to receive high-level government support. The new few months and years will determine if Pakistan is able to expand its use of wind power, and foster a greater commitment and investment in alternative energy. End comment.