A Canadian government entity has signed a memorandum of understanding (MoU) with the government of Pakistani province Khyber Pakhtunkhwa (KP) to cooperate on up to 1GW of solar energy projects in the region.

The Canadian Commercial Corporation (CCC) will help facilitate private companies to come in and contract with the KP government to set up renewable energy projects, a source at the trade department at the High Commission of Canada in Pakistan told PV Tech.

Location, project numbers and sizes have not been specified in the three-year MoU.

Discussing the purpose of the agreement, the source said: “The primary reason is that Pakistan is an energy deficient country. Because of that, they introduced policies which are attractive to foreign investors and foreign companies that want to invest in renewable energy.”

He also cited “attractive” upfront tariffs as a reason for various companies from Canada and other regions showing high interest in investing in both the wind and solar sectors in the South Asian country.

As the CCC is a government agency which facilitates government-to-government contracts, it helps private companies enter countries such as Pakistan and provides them with a form of cover if problems arise, added the source.

Last year Pakistan altered its solar feed-in tariff (FiT) rates for projects between 1-100MW capacity. The country also currently has 300MW under construction at the second phase of the project Quaid-e-Azam Solar Park (QASP) in Punjab.