A Chinese company has approached the authorities regarding setting up a solar panel manufacturing plant and has highlighted the importance of duty-free import of the necessary machinery.
The Chinese company has stated that the incentives given to solar panel importers should also be extended to manufacturers to ensure there is no significant price difference.
In a letter addressed to Jamil Qureshi, Secretary of the Special Investment Facilitation Council (SIFC), the CEO of Rina Solar Pakistan expressed the company’s intention to establish a plant in collaboration with the ACT Group. The solar panel assembly plant will be set up in the Port Qasim area of Karachi.
Moreover, in May 2024, Rina Solar’s Chairman Bo Li and other company representatives visited the SIFC offices. They also visited the Ministry of Industries and Power Division offices.
In addition, Pakistani officials assured the Chinese delegation of full cooperation in establishing solar energy-related manufacturing plants in the country.
Following assurances from the Government of Pakistan, the Chinese company accelerated the process of setting up the solar assembly plant. In the first phase, this manufacturing plant will produce solar panels required to generate 750 megawatts of electricity.
Additionally, the second phase will have the same production capacity, while in the third phase, 2 gigawatts of solar cells will be manufactured, with half of them available for export.
However, the Chinese company had hoped that the Government of Pakistan would announce a solar policy in the federal budget, but this did not happen. Despite this, the company is moving forward with its plans.
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Furthermore, the company believes it can operate profitably with a reasonable customs duty and sales tax structure.
The Chinese company’s CEO noted that importers enjoy zero customs duty and zero sales tax on solar panels. However, a sales duty of 18% is imposed on solar panel plants and parts, and solar cell imports are currently duty-free. As a result, the manufacturing sector faces challenges.
The Chinese company has proposed a long-term tax structure for manufacturing to maintain profitability in this sector. Such measures will encourage continued investment in solar panel manufacturing. In this scenario, Pakistan could save $300 to $500 million annually in foreign exchange.
