PAKISTAN: IFC agrees finance for Punjab power plant

12 January 1996

The International Finance Corporation (IFC) has agreed to provide equity and loan finance of up to $79.5 million to ALES Pak Gen (AESPG) for the construction of a power plant in Punjab on a build-ownoperate (BOO) basis. AESPG has been established by ABS Transpower of Singapore, a subsidiary of ABS Corporation of the US.

The plant will be oil-fired and will be the first plant in Pakistan to have a flue gas desulphurisation unit, which will limit the levels of sulphur dioxide emissions.

IFC has already assisted Pakistan in the formulation of its new power policy amid has invested in several power plants, including another AES project in Muzaffargarh (MEED 21:4:95).

IFC's financing package will comprise an equity investment of up to 10 per cent of AESPG's share capital; a loan of up to $20 million; and a syndicated loan of up to $50 million. Dresdner Bank, ING Bank, Natwest Markets, and Korea Merchant Banking Corporation are expected to participate in the syndicated loan. The Export-Import Bank of Japan is providing an additional $184 million.

The client is the Water and Power Development Authority. Pakistan State Oil Corporation will provide the fuel. The plant will have a 30-year concession and commercial operations are expected to begin by December 1997.

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