The International Finance Corporation (IFC) has led the financing of a first-of-its-kind programme to build six wind power projects in Pakistan, named the Super Six, with a total investment of $450 million.
The programme aims to help deliver cleaner, cheaper power to meet the country’s critical demand for energy and reduce reliance on expensive imported fossil fuels.
Financing agreements for the landmark wind power programme were signed by IFC’s senior manager, Nadeem Siddiqui and private sector power developers at a special ceremony witnessed by Pakistan’s Prime Minister, Imran Khan and Federal Minister for Energy, Omar Ayub.
The Super Six plants, with a combined capacity of 310MW, will deliver among the lowest-cost power generation in the country to date.
They will be built in the Jhimpir wind corridor in Sindh province and will generate more than 1,000 gigawatt-hours of electricity annually, enough to power 450,000 homes.
The programme is also expected to lead to emission reductions of about 650,000 tons of CO2 per year.
All Super Six projects are being developed by domestic companies: ACT Group, Artistic Milliners (Private) Limited, Din Group, Gul Ahmed Group and Younus Brothers Group.
“The government is aiming to increase the non-hydro renewable energy share in the overall generation mix from 4 to 20% by 2025 and it is welcoming to see Pakistan’s local private sector behind these Super Six wind projects, supporting the government’s long-term objective to see more wind and solar in the country’s energy mix,” said Ayub.
“This additional clean power will help meet growing demand, reduce the average cost of electricity, and improve both reliability and security of supply,” IFC’s Vice President for Asia and Pacific, Nena Stoiljkovic said. “We hope this will send a strong signal to the private sector that the renewable energy market in Pakistan is viable and sustainable, as well as beneficial to the Pakistani people.”
IFC financing package
As part of the programme, IFC is providing a financing package of $320 million, comprising $86 million from its own account and $234 million mobilised from other lenders, which include Deutsche Investitions- und Entwicklungsgesellschaft (DEG, part of KfW Group of Germany), and local banks Bank Alfalah, Bank Al Habib and Meezan Bank.
The programme is in line with the joint energy strategy of the World Bank Group, which includes IFC, the World Bank and the Multilateral Investment Guarantee Agency (MIGA), to help address Pakistan’s structural issues in the energy sector, through policy reforms and increases in private investments to expand clean energy generation and bring down the cost of power.
The cost of power from the Super Six projects is expected to be more than 40% lower than the current average cost of generation, a move that is expected to spur more investments in renewable energy in the country.
IFC, one of the largest investors in Pakistan’s power sector, financed the first wind power project in the country in 2011 and helped created the framework for financing hydro and wind Independent Power Producers. With this programme, IFC will have made investments in 11 wind power projects in Pakistan.
The World Bank is supporting the government on policy reforms to enhance the energy sector’s sustainability and the implementation of the upcoming new renewable energy policy framework.