Client Name

Aga Khan University Hospital

Faculty Advisor

Ms. Zahra Riaz Nakhoda

SBS Thought Leadership Areas

Investment Decision Making

SBS Thought Leadership Area Justification

Our project is best suited to the Investment Decision-Making thought leadership area. The project involved the development and application of rigorous financial models to support strategic investment decisions (primarily capital allocation) with respect to solar panel deployment. The project entailed in-depth evaluation of the various procurement models (EPC vs PPA) via benchmarking the proposed installation to recent industrial installations and vendor offerings. It also entailed a cost-benefit analysis and vendor assessment that included both quantitative and qualitative factors to assess which vendor would be best suited to the installations. The project aimed at equipping the AKU Business Development Team (decision-makers) with data driven insights which not only guide the immediate solar implementation but provides a baseline for future investments in clean energy infrastructure.

The results and recommendations of the project also provide broader implications for investment decision-making in a capital-intensive institutional setting. The ELP Project combines technical viability with financial viability, thereby demonstrating that sustainability and profitability can often be jointly pursued, which is an emerging and critical theme in ESG-led investment strategies.

Aligned SDGs

GOAL 7: Affordable and Clean Energy

Aligned SDGs Justification

  • SDG 7 - Affordable and Clean Energy: This SDG is directly relevant to our ELP project as solar installations promote renewable energy and reduce reliance on fossil fuels thereby promoting cleaner sources of energy at a substantially affordable cost to the institution.
  • SDG 12 - Responsible Consumption and Production: Our ELP project complies with this SDG as it promotes an efficient and effective energy use and thereby contributes to a reduction in carbon emissions aligning with AKU’s commitment to achieving Net Zero by 2030.
  • SDG 13 - Climate Action: The ELP project touches on an initiative that addresses the threat of climate change. Via strategic solar installations, our project reduces carbon emissions, promotes renewable energy by a transition towards sustainable consumption and production. Collectively, this enhances climate resilience.
  • SDG 11 - Sustainable Cities and Communities: The implementation of strategic solar installation across Agha Khan’s outreach locations that are located in the midst of major cities across Pakistan, our project contributes to providing decentralized clean energy solutions that strengthen infrastructure leading to overall sustainable communities.

NDA

No

Abstract

This ELP was conducted in conjunction with AKU’s Business Development Division with a central focus on enhancing energy efficiency and lessening the detrimental impact of rising electricity costs on the operational costs through strategic deployment of solar panels across AKU’s outreach locations across Pakistan. The overall objective was to evaluate the financial and technical feasibility of solar installation across the shortlisted 20-30 owned properties and further provide strategic recommendations based on our assessment. The broader aim was to contribute to AKU’s commitment to achieving Net Zero emissions by 2030.

Our project was divided into three main phases: a benchmarking study, a vendor analysis and a financial feasibility assessment. The benchmarking study entails interviews with representatives from three leadings organizations to gauge insights into solar installations across different sectors (education, energy and insurance) and provide a comparative study of the intricacies involved in the process. The vendor analysis entailed evaluating nine vendors using both primary (interviews) and secondary resources (internet-based literature) to evaluate vendor competencies based on a range of criteria that amongst others included technical expertise, sector experience, financial aspects and strategic fit with AKU’s circumstances. Finally, based on shortlisted locations a detailed financial feasibility report and corresponding financial models for each site were developed to assess the profitability of solar deployment using key performance metrics such as NPV, IRR and Payback Period.

Major findings show that solar deployment not only aligns with AKU’s sustainability goals but also results in significant cost savings (upto Rs.30-40 per unit) compared to current electricity pricing in Pakistan. The vendor analysis identified a range of high-fit vendors among which Reon and Greaves were identified as the most suitable alternative options to the existing vendor (Exide), and EBR was identified as having a moderate strategic fit but still a viable option due to its regional expertise. The benchmarking study highlighted that for AKU’s context a tailored approach is recommended and their current practices such as their prioritization of EPC models for near-term deployment as well as existing vendor relationships are sound. Other considerations could include exploring Power Purchase Agreements for long-term scalability, carbon credit programs and monitoring mechanisms to ensure operational resilience.


Document Type

Restricted Access

Document Name for Citation

Experiential Learning Project

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