Islamabad, Pakistan, March 14, 2017—IFC,
a member of the World Bank Group, is investing $100 million in the landmark
720-megawatt Karot run-of-river hydropower project in Pakistan, one of
the largest private sector renewable energy projects in the country, to
help address severe power shortage and spur growth.
IFC’s support for the $1.7 billion
project on the Jhelum River, which has now reached financial close, marks
IFC’s first project finance engagement with China Three Gorges Corporation
(CTGC), one of the world’s largest renewable power companies. In 2015,
IFC acquired a 15 per cent stake in China Three Gorges South Asia Investment
Limited, CTGC’s renewable energy platform company in Pakistan, to help
develop a series of renewable energy projects in Pakistan that are expected
to provide electricity to more than 11 million people.
Pakistan has been suffering
from a severe power deficit resulting in load shedding of over six hours
per day on average, hampering the country’s economic growth and development.
The Karot plant, which should be
operational in five years, is expected to generate 2,970 gigawatt-hours
of net energy annually, providing affordable, clean power to about 3 million
“Improving access to electricity in
Pakistan is a priority for IFC and the World Bank Group, and we are pleased
to see the Karot project advance,” said Bernard Sheahan, IFC Global Director
for Infrastructure and Natural Resources. “Our priority has been to support
the sponsor and the company in the project’s development by strengthening
their environmental, social, and corporate governance capabilities, to
ensure power is delivered sustainably.”
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 supporting a number
of hydropower plants in the Jhelum-Poonch Watershed, totalling some 2,750
megawatts. This has been complemented by advisory work supporting river
basin management and biodiversity risk mitigation.
Karot is IFC’s largest hydroelectric
power project to date and represents IFC’s first major collaboration with
the China Export Import Bank, China Development Bank, and Silk Road Fund.
IFC was able to bring its considerable Pakistan experience and global project
finance expertise to help finalize the deal.
The project is a major contribution
to the joint World Bank Group Transformational Energy Initiative and Joint
Implementation Plan in Pakistan, which aims to mobilize $10 billion in
new generation investments to address Pakistan’s acute power shortage
and improve sector sustainability.