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Pakistan: EUR 50 million loan for renewable energy

Pakistan: EUR 50 million loan for renewable energy


The European Investment Bank (EIB) has granted a EUR 50 million long-term loan to the Government of Pakistan for the rehabilitation of the Warsak hydroelectric power station.

The Warsak plant is located on the Kabul River 20 km east of the border with Afghanistan and 30 km northwest of the city of Peshawar. The project includes the repair, upgrading and replacement of civil engineering structures and mechanical and electrical equipment to make the plant fit for a further 40 years of operating life. The rehabilitation works will restore the capacity of the plant to 243 MWe.The project will provide a clean and reliable supply of energy while helping to avoid high emissions of CO2 and other harmful atmospheric pollutants. It also includes measures to manage flood waters. The project will feed the renewable energy into Pakistan’s national grid, benefiting the whole community.

The project is also receiving financial support from the French Development Agency (AFD) and KfW and has been structured under the mutual reliance initiative. This collaborative approach will make it possible to exploit synergies between the financial institutions. The EIB funding corresponds to some 30% of the total cost of the project.Β  Alongside the EIB loan, the project will receive EUR 4.5 million from the Asia Investment Facility (AIF).This is the sixth lending operation mounted by the EIB in the country, the last one being the EUR 100 million loan for the construction of the Keyal Khwar Hydropower project, signed in February 2014.

EIB lending in Asia and Latin America (ALA) started in 1993 and is governed by mandates from the European Union (EU). Since then the EU bank has signed contracts in the region totaling EUR 5.8 billion. The current ALA mandate covers the period 2014-2020 and sets a lending ceiling of EUR 1 billion for Asia. The EIB is granting this loan under this new 2014-2020 mandate, which enables it to support investments designed to foster the growth of the local private sector, develop economic and social infrastructure and mitigate the effects of climate change.

Anand Gupta Editor - EQ Int'l Media Network


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