The first successful power policy was introduced in 1994 and was followed by the 1995 Hydel Policy, the 1995 Transmission Line Policy, the 1998 Power Policy and finally the 2002 Power Policy.
Salient Features of Power Policy 2002:
- Scope of the policy covers private, public-private and public sector projects.
- Invitation of bids through International Competitive Bidding.
- Unsolicited bids would be welcomed to develop raw sites (without already prepared feasibility study).
- Power companies will be allowed to import plant and equipment not manufactured locally (for hydel and thermal projects including projects based upon renewable resources) at concessionary custom duty rates of 5%
- Companies will be completely exempted from the payment of income tax, including turnover rate tax, and withholding tax on imports.
- Any variation in price of fuel would be passed through to the power purchaser. Similarly any additional taxation over and above the Tariff assumptions is liable to be passed on to the power purchaser.
- Various tariff components will be indexed for variation in the PKR and USD exchange rates as well as US inflation.
- Any legitimate cost escalation between the date of application to NEPRA and the financial closing would be accounted in the final tariff determination at the Commercial Operations Date.
- The term of the concession period for hydropower projects in the private sector will be up to 50 years.
- To broaden the access for debt financing, debt can be obtained by IPPs in US Dollar, Pound Sterling, Euro and Yen.