ISLAMABAD, Dec 26: Engro Energy (Pvt) Limited, a 100 per cent owned subsidiary of Engro Chemical Pakistan, has concluded signing of project financing documents with a consortium of foreign institutions which together would provide $154 million for the 217-MW power plant being built near Qadirpur (Ghotki district) in Sindh, a spokesman for the company announced on Wednesday.

The consortium comprises leading international foreign financial institutions, includeing IFC, DEG, Proparco, FMO, Swedfund International and Opec Fund for International Development, the company stated, placing the total cost of the project at $205 million.

The local office of the International Finance Corporation (IFC), a member of the World Bank Group, simultaneously announced that it had signed an agreement to offer a $59.5 million financing package to support Engro Energy’s combined cycle power project.

The power plant would generate electricity using low-quality gas, which would otherwise be flared, IFC stated and added that the technology would reduce the average cost of power generation.

Substantial investments in power generation in the country were needed to relieve serious power shortages, a situation that could deteriorate in coming years.

The IFC package would include $59.5 million loan and $2.6 million in equity. Other contributing development financial institutions include the DEG, the FMO, the OFID, Proparco and Swedfund, IFC stated.

Rashad Kaldany, IFC Director for Infrastructure, said: “The project will help Pakistan meet a rapidly growing demand for power and contribute to the country’s economic growth.”

The project will also help reduce carbon emissions by avoiding the flaring of gas.

Engro Chemical Pakistan expects power generation to be one of its core businesses in the future.

Engro Energy observed that the project was first-ever Pakistani private sector power project being funded by Swedfund and Proparco, while the German development finance institution, DEG is actively supporting projects in Pakistan as an international finance partner since last two years after resuming its activities in Pakistan.