Pakistan’s largest wind project gets funded
The largest wind farm in Pakistan has secured US$238mn in debt finance, with the IFC leading the lending.
The World Bank’s commercial arm is to lend US$66mn from its own book, and has arranged an additional US$172mn from other development banks, namely the Asian Development Bank, the Islamic Development Bank and DEG, a German institution.
The borrower is Triconboston Consulting Corporation, a subsidiary of Pakistani industrial conglomerate Sapphire Group. The money will construct three new 50MW wind farms in the Sindh province – the first time in Pakistani history that three separate plants have been financed by a single consortium.
It will be commissioned by the end of 2018 and marks the latest chunk of development finance to roll into the country’s energy sector.
In January, the government signed loan agreements worth US$720mn with the Asian Infrastructure Investment Bank (AIIB) and World Bank, to support hydropower projects in the country.
In March, the IFC lent US$100mn towards the construction of the 720MW Karot hydropower plant, one of the largest renewable projects in Pakistan.
Meanwhile, as part of the One Belt One Road (OBOR) initiative, the Chinese government has poured bilateral loans totalling US$63bn into Pakistan, many of which will fund power plants along the China Pakistan Economic Corridor, which links China to the Arabian via the Gwadar Port in south Pakistan.
The wind farms in Sindh will power 600,000 homes and help power industry in an area that is prone to blackouts.
“The IFC has been at the forefront of investing and mobilising financing to support private sector participation in Pakistan’s power sector. This is our fifth investment in wind power in the last three years in Pakistan. The project will also support Sapphire in their diversification strategy in renewables,” says Mouayed Makhlouf, the IFC’s director for the Middle East and North Africa.
Solar energy is also a key part of the drive to bridge Pakistan’s energy deficit. In 2015, China constructed the world’s largest solar farm in Punjab, the Quaid-e-Azaim Solar Power Park, which cost US$130mn to construct. (It has since been overtaken as the world’s largest solar facility by the 850MW Longyangxia Dam Solar Park in China’s Qinghai province which, at 27km2, is only slightly smaller than Macau.)take me back