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2. Investment in Energy Today Our Key to a Prosperous Khyber Pakhtunkhwa Tomorrow Government of Khyber Pakhtunkhwa Energy & Power Deptt Amendments in Provincial Hydel Power Policy 2006 2

3. Provincial Hydel Power Policy 2006 Why Amendments in 3

4. Reasons for revising Policy for Hydropower Generation projects 2006  CCI (dated 28-04-2011) removed the bar of 50 MW entitling provinces to undertake projects of any magnitude  Changes proposed in Federal Power Policy 2002 and prompting changes in Provincial Policy 2006  Problems faced by investors 4 Provincial Hydel Power Policy 2006

5.  Procedural and legal complications  Reluctance of Financial institutions / lenders to finance power generation projects 5 Difficulties faced by Sponsors

6. Objectives of Amending 2006 Power Policy  The proposed amendments will  Attract investment  Boost the confidence of the sponsors  Address concerns of sponsors 6

7. Salient Features of proposed Amendments  Bar of 50 MW removed and now province can issue LoI & Los for project of any magnitude  Bidding will not be applicable for raw site of any capacity. Raw site of any capacity will be awarded on first come fist serve basis  For early award of sites level of approving forum upto 50 MW has been brought down from Board to Secretary Energy & Power Department 7

8. …Cont  To reduce the cost of business, Representatives of Irrigation as well as Energy & Power Department have been included in the processing committee  New processing fee structure  Tripartite agreement introduced to enable investors to raise loan for the project  Concession period will be upto 30 years Salient Features of proposed Amendments 8

9.  It will be obligatory on part of Provincial Departments to issue NOC to Investors within 15 days on receipt of the case from PHYDO  Force majeure clause has been included Salient Features of proposed Amendments …Cont 9

10. Decision Required  The Provincial Cabinet is requested to accord approval to the following amendments in Power Policy 2006:  Clauses 29, 32, 34, 35(i & iv), 38, 43, 44, 45, 47, 52,53, 55, 65, 67, 70, 73, 75, 76, 77, 112 and 118 10

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12.  Mandate  Hydropower Generation  Oil & Gas Sector  Renewable Energy  Working with two Ministries at Federal Level  Ministry of Water & Power  Ministry of Petroleum & Natural Resources Mandate of Energy & Power Department 12

13. Articles Related to Energy & Power Sector ARTICLEDEALS WITH 154CCI 157Electricity 158Natural Gas( Priority of the Province) 161Royalty, Excise Duty and Net Hydel Profit 172 (3)Joint Ownership of Oil & Gas between Federation and province 13

14.  Federal Policies  Power Policy for Generation 2002  Alternate Renewable Energy Policy 2011  Federal Petroleum Policy for Exploration & Production, 2012  Provincial Hydel Power Policy 2006 Policies related to Power Generation & Oil Gas Production 14

15.  Make the policy more investor friendly and to address certain emergent needs, Energy & Power Department intends to carry-out some rational proposed amendments as interim-gap arrangement in the Provincial Hydel Power Policy 2006  Amendments have been proposed in few clauses which include 29, 32, 34, 35(i & iv), 38, 43, 44, 45, 47, 52, 53, 55, 65, 67, 70, 73, 75, 76, 77, 112 and 118 15 Rational Need for Proposed Amendments in Hydel Policy 2006