Islamabad—IFC, a member of the World Bank Group, is providing $60 million in Star Hydro Power Limited to support the construction of a private hydro-power project in Pakistan and increase the country’s supply of renewable energy.
The 147 megawatt run-of-the-river power plant is the largest privately financed hydro-power development in Pakistan. Export-Import Bank of Korea, Asian Development Bank and Islamic Development Bank are also financing the $409 million project.
The project promotes cross border investment and Foreign Direct Investment by supporting the entry of a Korean water utility company in Pakistan, a country where only about 16 percent of its hydro-power resources have been harnessed. Few international players currently operate in Pakistan’s power sector and IFC’s support has been instrumental in the financing of the project.
“A reliable power system is essential for the economic development of Pakistan, and this project will help us towards that goal,” said Byung Hoon Yune, Vice President, Oversees Buisness, Korea Water which owns 80 percent of Star Hydro Power Limited. “IFC’s support is a vote of confidence in not only our company, but also in Pakistan’s electricity sector.”
“IFC’s partnership with Star Hydro, one of our key clients, enables us to extend additional support to the renewable-energy sector in Pakistan,” said Adil Marghub, IFC’s Infrastructure Manager for the Middle East and North Africa. “We hope this project will stimulate the interest of other investors in harnessing the country’s favorable hydro resources.”
While helping alleviate a severe power shortfall in Pakistan, this project will also help reduce the country’s reliance on imported fuel for power generation. Since 1995, IFC had funded more than 3,300 MW in generation capacity in the power sector in Pakistan.