Foundation Wind Energy-I Limited and Foundation Wind Energy-II (Pvt) Limited entered into an Implementation Agreement (IA) with the Government of Pakistan for the establishment of two wind power projects of 50 MW each, in Gharo, Sindh, here Tuesday. Formal Financial Close of the two wind power projects would be done, shortly.
Foundation Wind Energy Limited- I and Foundation Wind Energy Limited- II are two independent subsidiaries of a prestigious national organization, Fauji Foundation.
The Agreement was signed by Brig. (Retd.) Dr. Ghulfam Alam, Member Board / Project Director of the two power project entities, on behalf of Foundation Wind Energy I Ltd. and Foundation Wind Energy II Ltd. and Mr. Arif Alauddin, CEO AEDB, on behalf of the Government of Pakistan.
Managing Director of the two companies, Lt Gen. (Retd.) Muhammad Mustafa Khan, speaking on the occasion briefed on the projects. He informed that the two wind farms having total project cost of approx. US $ 251 Million are being financed by Asian Development Bank and Islamic Development Bank and syndicate of local banks lead by National Bank of Pakistan. The debt financing, which is 75% of the project cost, is purely Sharia Complaint and is the first of its kind in Pakistan. The remaining 25% of the project cost is being financed via equity investment, arranged majorly by Fauji Foundation group (Fauji Foundation and Fauji Fertilizer Bin Qasim Ltd), CapAsia Singapore and Tapal Group Karachi.
He said that the Engineering, Procurement and Commissioning (EPC) Contractor of both the projects is a consortium comprising of with M/s Nordex Germany & M/s Descon Engineering Limited, Pakistan. Both the projects are being installed with a cumulative of forty Nordex Wind Turbines each having a capacity of 2.5 MW. The combined total energy output of both the projects in approx. 288 GwH per annum.
He said that the two projects are targeting to have their Energy Purchase Agreement, signed in December 2012 and achieve financial closure immediately thereafter. Financing agreement was signed in May, 2012. The completion period, of each project, is 15 month from Financial Close, and both the projects are being targeted to be the Commercial Operation during second quarter of 2014. However, pre-financial close onsite construction works are already in progress.
He said that FFC Wind Energy Limited (FFCEL), a project of Fauji Fertilizer, a company under Fauji Foundation has already established a 50MW Wind project, which is ready to be commissioned during the current month.
Talking on the occasion, Mr. Arif Alauddin, CEO AEDB said that the Foundation Wind Energy-I and II were trend setting projects in many ways; these are the first projects being established in Gharo (the others are located in Jhampir area), and attracted many project developers like China Hydro, Dawood Power etc, thus opening doors of investment out of traditional Gharo Keti Bandar Wind Corridor. The projects have opened doors of many more projects in the area, where already AEDB signed for development of a number of projects of 250MW capacity, he added. The projects he said have changed many perceptions about land / area, funding, EPC contractors, financial services etc.; the project is being installed by Pakistani Contractor, M/s DESCON jointly with M/s Nordex (Germany) with local manufacturing of the projects components. Another feature of these two projects is the Islamic mode of financing, which will open new avenues of financing from international lenders / banks working in Islamic financing mode.
Alauddin listed many wind power projects which are in various stages of development. He said that currently 45 Wind Power projects of around 3,200 MW capacities are under process. The Government of Sindh (GoS) leased around 26,000 acres of land to AEDB for 18 projects with cumulative capacity of 906 MW, which are at different stages of development, he said, and added that 106 MW are ready for commencement, while another 100 MW are to have Financial Close, shortly.
Responding to a question, Alauddin said that with focus on vast alternative / renewable energy potential in the country, the Government is working on development of indigenous, inexpensive and environmentally friendly technologies.