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Pakistan Removes Taxes From Manufacture of Renewable To Overcome Power Shortage

That might be resolved in part by the government starting a certification system for renewable energy products to grade them according to quality, he said.

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Pakistan
Technicians work on a solar panel about 25 km (15 miles) from Karachi, Pakistan, June 18, 2010. VOA

Pakistan’s government has proposed to eliminate taxes associated with manufacturing of solar and wind energy equipment in the country, in an effort to boost the production and use of renewable power and overcome power shortages.

A new government budget bill, expected to be approved in parliament within a month, would give renewable energy manufacturers and assemblers in the country a five-year exemption from the taxes.

“Pakistan is paying the heavy cost of an ongoing energy crisis prevailing for the last many years,” Finance Minister Asad Umar said last week in a budget speech. “In this difficult time, the promotion of renewable energy resources like wind and solar has become indispensable.”

Only about 5 to 6 percent of the power to Pakistan’s national electrical grid currently comes from renewable energy, according to the country’s Alternate Energy Development Board (AEDB).

Pakistan
 The rooftop photovoltaic installation supports the Department of DefenseÕs goal of increasing renewable energy sources to 25 percent of all energy consumed by the year 2025. 

The proposed tax reduction should boost that by encouraging greater local manufacturing of equipment needed for renewable power expansion, said Asad Mahmood, a renewable energy expert with the National Energy Efficiency and Conservation Authority, which sits within the Ministry of Energy.

Remaining hurdles

But manufacturers said the tax breaks likely would not be sufficient to spur expansion of local renewable energy industries.

Naeem Siddiqui, the chairman of Ebox Systems, which assembles solar panels in Islamabad, said the new tax breaks were good news but Pakistani manufacturers would still struggle to compete with tax-free, low-priced imports of foreign-built solar panels and other renewable energy equipment.

“The government has already waived off taxes and duties on the import of renewable energy products, and local manufacturers cannot compete with the low-priced imported items,” he said.

Pakistan today imports more than 95 percent of the solar panels and other renewable energy systems it uses, largely from China, said Aamir Hussain, chief executive officer of Tesla PV, one of the largest manufacturers of solar energy products in Pakistan.

Solar panels
Workers install photovoltaic solar panels at the Gujarat solar park under construction in Charanka village in Patan district of the western Indian state of Gujarat, India. India is planning new large-scale installations of the technology on hydropower reservoirs and other water bodies in Tamil Nadu, Jharkhand and Uttarakhand states, and in the Lakshadweep islands. VOA

“As long as the government will not impose duties on the import of finished products, the local market cannot grow,” he said.

Pakistani manufacturers also might need government help in pushing sales of new Pakistani clean energy products abroad, in order to build bigger markets and lower manufacturing costs, Siddiqui said.

Mahmood, of the energy ministry, said he believed the government would also move to cut existing duties on the import of components used in manufacturing finished renewable energy products, in order to help Pakistani manufacturers.

Taxes on those components have pushed up prices of Pakistani-made renewable energy systems, making them harder to sell and leading several companies to the brink of failure, he said.

Certification system

Local manufacturers should work with the government to determine which components should be manufactured locally and which imported to ensure costs of locally made wind and solar systems are competitive, he said.

Pakistan, Sikh
A man waits to cross a portion of track once shared with the Karachi Circular Railway line in Karachi, Pakistan. VOA

Muhammad Abdur Rahman, managing director of Innosol, a company that imports and installs renewable energy systems, said that cheap imports of renewable energy systems from China remain the main barrier to building more such systems in Pakistan.

“The local industry is facing pricing issues because of low-quality solar energy appliances being imported in the country that are very cheap as compared to the local market,” he said.

Also Read: Pakistan Appoints its First Ever Female Hindu Civil Judge

That might be resolved in part by the government starting a certification system for renewable energy products to grade them according to quality, he said.

Amjad Ali Awan, chief executive officer of the Alternate Energy Development Board, said the aim of the new policies was for renewable energy to supply 28 to 30 percent of the country’s national electrical grid by 2030. (VOA)

Next Story

Private Sector Companies Join Hands to Support Refugees’ Access to Clean Energy

Private Sector Joins Clean Energy Drive for Africa's Refugees

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Solar Energy
A miniature solar energy panel at the Refugee Forum in Geneva. VOA

By Lisa Bryant

In northern Ethiopia, tens of thousands of mostly Eritrean refugees are getting connected to families back home, partly thanks to last year’s peace deal between Addis Ababa and Asmara, but also to clean energy.

A Spanish alliance that includes three power companies is linking refugee camps in Shire, near the border with Eritrea, to the country’s energy grid, which largely relies on hydropower. The next step is equipping refugee households with solar energy.

“It’s a catalyst,” said Javier Mazorra, partnership coordinator for the group, Alianza Shire. “You need energy for health, for education, for protection, especially for women.”

Humanitarians hope what is happening in Shire will someday become the new normal, amounting to a game changer for refugees, 90% of whom have limited access to electricity, according to the United Nations. Indeed, energy access counted among key issues addressed this week at a global refugee forum in Geneva, with Africa considered a top priority.

“The current situation in Africa is pretty poor, pathetic,” said Andrew Harper, climate action special adviser for the U.N. High Commissioner for Refugees, which co-hosted the meeting.

Often refugees have a single solution, “which is going to surrounding forests, woodland, and cutting it down,” Harper said.

Greening Africa’s energy 

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Climate action special adviser Andrew Harper of UNHCR, which has launched a sustainable energy strategy for its refugee camps. VOA

The refugee agency has launched a four-year strategy to transition to clean energy in all of its camps, although Harper offered no fixed deadline or price tag for doing so. A UNHCR-sponsored report out this week also found renewable energy to be a cost-effective and reliable energy source for refugees.

For Africa in particular, the stakes are high — inside and outside refugee settings. Along with Asia, it has among the world’s highest rates of reliance on charcoal and firewood. Adding in charcoal exports, that has translated into massive deforestation in parts of the continent.

Firewood- and charcoal-based energy also carry myriad other problems, posing health risks from smoky fires and security threats for women collecting charcoal, and heightening tensions between refugees and host communities who also rely on the fast-thinning trees.

Kathleen Callaghy clean energy
Kathleen Callaghy of NGO Clean Cooking Alliance believes the private sector should partner with humanitarian efforts in bringing clean energy to refugees. VOA

Many of these problems can be seen in East Africa, home to some of the continent’s largest refugee communities.

“There are some energy solutions,” said Kathleen Callaghy, senior humanitarian program associate for Clean Cooking Alliance, a Washington, D.C.-based nonprofit. “But the funding, the political will and the capacity of organizations in the humanitarian community is not enough to sustain or expand these projects over time.”

In drought-prone Ethiopia, the government launched a massive reforestation initiative that saw more than 350 million trees planted countrywide in a single day.

“This challenge is one of the prominent challenges we have,” he said, adding host communities are facing the fallout.

Convincing private sector

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Fisseha Meseret Kindie, of Ethopia’s refugee agency, says the country needs support to develop clean energy for the refugees it hosts. VOA

Transitioning to green energy in Africa will mean tapping a private sector that may be wary of investing in refugees and a continent deemed risky.

“Quite honestly, there’s very little in it for them right now,” Callagh, of the Clean Cooking Alliance, said, suggesting alliances with humanitarian agencies as the way forward.

But for Mazorra, of Alianza Shire, the payback is more than financial.

“There are a lot of incentives,” he said, including learning to operate in risky settings. “When you are struggling with really poor resource situations, innovation is key. And there are some innovations that could go back to Spain.”

Harper, of UNHCR, believes there’s another, broader case to be made.

Also Read- Smoking Declines among Men for the First Time: WHO

“We’re basically saying the market for this in Africa is not just 6, 7 million refugees,” he said. “It’s 1.2 billion people. We’ve got to look at it as much more part of the rural electrification process across the continent.” (VOA)