The International Finance Corporation (IFC), a member of the World Bank Group, will provide financing of $66 million and mobilising a further $172 million to help build Pakistan’s largest wind farm.
This financing will help overcome the energy shortage and boost the development of renewable energy.
According to an announcement made by IFC on Friday, the financing to Triconboston Consulting Corporation will help construct and operate three new 50MW wind farms in Sindh.
Triconboston is majority owned by the Sapphire Group, a leading Pakistani industrial group, with significant interests in textile and power.
Triconboston Consulting (Private) Limited owns and operates wind power generation farms. The company is based in Karachi. As of March 31, 2015, Triconboston Consulting (Private) Limited operates as a subsidiary of Sapphire Textile Mills Ltd.
The project is part of IFC’s broader efforts to foster private participation in Pakistan’s power sector and to increase investment, help diversify energy resources, cut the cost of electricity, and reduce the use of polluting and expensive fossil fuels.
Pakistan suffers from frequent power cuts that hamper social and economic development, and cost the country an estimated two percent of gross domestic product every year.
“The new wind farm will generate reliable, clean energy at lower rates and help reduce pressure on the country’s power grid, while mitigating climate change,” said Nadeem Abdullah, CEO of Triconboston.
“It is a testament to Sapphire’s ambition to become a leading renewable power developer in Pakistan, after having already successfully commissioned our first 52.8MW wind farm in 2015.”
This is the first time in Pakistan that a portfolio of three separate plants will be internationally financed by a single consortium, bringing further innovation to Pakistan’s project finance market.
Other financiers include the Asian Development Bank, the Islamic Development Bank, and DEG – Deutsche Investitions-und Entwicklungsgesellschaft.
The plant is expected to be fully commissioned by the end of 2018 and will make its greatest contributions during the high-demand summer months, providing clean power to around 600,000 residential customers.
“IFC has been at the forefront of investing and mobilising financing to support private sector participation in Pakistan’s power sector,” said Mouayed Makhlouf, IFC’s director for the Middle East and North Africa region.
“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.”
The development of wind power contributes to the diversification of Pakistan’s energy generation mix by increasing capacity with shorter lead times and also in helping reduce electricity prices.
The work is part of the World Bank Group’s Pakistan Transformational Energy
Initiative and Joint Implementation Plan, which aims at mobilising $10 billion in new generation investments to address the country’s acute power shortage and improve sector sustainability.
Pakistan represents IFC’s second-largest engagement in the Middle East and North Africa region, with over $5.6 billion in cumulative investments committed to-date.
IFC is the largest global development institution focused on the private sector in emerging markets.
“Working with 2,000 businesses worldwide, we use our six decades of experience to create opportunity where it’s needed the most.”
“In FY16, our long-term investments in developing countries rose to nearly $19 billion, leveraging our capital, expertise and influence to help the private sector end extreme poverty and boost shared prosperity.”