Asian Development Bank to finance $36.8 million for wind farm in Pakistan

Asian Development Bank to finance $36.8 million for wind farm in Pakistan

Thursday, October 27: The Asian Development Bank (ADB) has revealed on their website that it is going to finance a loan of $36.8 million to Zorlu Enerji Electrik Uretim, a Turkish wind farm company, to help set up a privately owned
wind farm in Hyderabad, Sindh, Pakistan.

This will be the first privately owned wind farm in the country. The purpose of the project is to install wind turbines at farms this will raise the power production at the locations from current 6 MW to 56.4MW.

This additional power will provide much-needed electricity for the economy and reduced their dependence on fossil fuels. Currently the output from these farms will be allocated to Sindh, however, as other phases are completed the
electricity will be provided to all country.

Michael Barrow, Director in ADB’s Private Sector Operations Department, has high hopes attached with the project and believes it will bring more investment in the wind sector, which according to him has great chances of progressing.

Michael Barrow said, “Acute energy shortages, caused by low investment, are cutting into Pakistan’s economic growth. This deal should provide a bankable template for future privately funded wind projects and send a signal that
the wind sector is attractive for private sector investment and financing.”

Throughout the history, Pakistan has produced most of its energy using fossil fuels. Most of the time countries demand for fuels exceeds its supply thus they had to import it from other countries this puts a lot of burden on the
foreign exchange reserves and global price fluctuations. The government does not possess enough funding to meet the demand for imports and thus they are forced to introduce power rationing in the country.

This is just first phase one of the project the second phase is expected to be completed by 2013. Once the second phase is completed the farm will start to provide with power to the national grid.

As per the agreement, the company will charge National Transmission and Dispatch Company a tariff, which will be accessed according to market conditions, and the rate will drop as the project time passes.

Total Cost of this project is estimated to be around $147 million. The Turkish company is currently financing 30% of this through equity while the rest 70 % is being loaned from from ADB, ECO Trade and Development Bank and the
International Finance Corporation as well as from Habib Bank.

Short URL: https://www.newspakistan.pk/?p=1797

Posted by Wajahat Javed on Oct 27 2011. Filed under Business, Pakistan. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry