The final phase of financing for a 362-MW private power project in Muzaffargarh has been completed with the 7 April signing of a $49.5 million debt/equity package by the Washington-based International Finance Corporation (IFC). Total costs are estimated at $350 million.

The IFC financing consists of a $40 million loan and a 10 per cent equity investment in AES Lal Pir, the company which has been set up by the US’ AES Corporation to run the plant. AES is to take a 90 per cent stake in the company (MEED 24:2:95).

The Bank of Tokyo in London, has arranged a Y20,250 million ($209 million) loan from international commercial banks with support from the Export Import Bank of Japan (Jeximbank).

AES, one of the largest US independent power producers, will operate and maintain the plant. It will have a single residual fuel-oil boiler and a single steam turbine generator. Japan’s Mitsubishi Heavy Industries is the turnkey contractor. Commercial operations are expected to begin in December 1997.

The Water & Power Development Authority (WAPDA) has approved a 30-year power purchase agreement. Pakistan State Oil has a 30-year fuel supply agreement.

At the signing ceremony, AES chief executive Dennis Bakke said that the US government support for private projects had helped to crystallise the policy framework and incentives which have created an attractive investment climate for US firms in Pakistan.