Markhor Energy is in the process of developing a renewable energy platform in Pakistan. The platform will focus mainly on developing small scale hydro power projects in Pakistan. Additionally, Markhor Energy will also make investments in other renewables sectors such as Wind & Solar.
Markhor Energy has chosen to focus on small scale hydro power development in Pakistan due to the abundance of suitable sites. The northern regions of the country have many potential high head sites, and there is potential to develop many low head sites in the Punjab and Sindh region on the rivers and irrigation canals.
While Pakistan has undertaken many large scale hydro power projects, there are not many small scale hydro power projects in the country. The government is very keen to promote hydro power projects, and is offering many incentives such as:
Sovereign Guarantee backed Power Purchase Agreements
Long Concession Periods3
Income Tax Holidays
Dollar based IRR
But there is a lack of technical skills in the small scale hydro sector in Pakistan. This not only increases the cost of initial development of small hydro projects in Pakistan, but also increases the risks associated with project development. Our aim is to localize these skills with time, and reduce cost and development risk. In the long run small scale hydro will prove to be extremely beneficial for Pakistan as it not only helps reduce the energy deficit in the country, it brings power to remote hard to reach locations. Besides the direct employment created by the hydro power project, there will be also be an increase in the indirect employment in the region due to the increased economic activity bought about by the hydro power project.
As small scale hydro power projects are typically built as run of the river plants, they are more socially and environmentally friendly. Very little land is required, and as such there are no major resettlement issues as experienced in large scale hydro power projects.
Pakistan is an energy deficient country, as such the Government of Pakistan is offering many financial incentives to these projects. The power purchaser is a government entity, and the power purchase agreement is backed by a sovereign guarantee. For most projects the tariff is determined on a cost plus basis for thirty years and offers an IRR in the range of 15-20% in dollar terms.
As such these projects are very attractive on an economic, social and environmental basis.See more