ADB supports Pakistan's first privately owned wind farm

ADB will be providing a loan to help fund the first privately owned and financed wind farm in Pakistan.

Zorlu Enerji Electrik Uretim will use the US$36.8 million loan to install wind turbines to increase the output of its wind farm – located in the southern Sindh province, 100 kilometers northeast of Pakistan’s commercial hub of Karachi – from the current 6 megawatts to a total 56.4 megawatts.

“Acute energy shortages, caused by low investment, are cutting into Pakistan’s economic growth,” said Michael Barrow, Director in ADB's Private Sector Operations Department. “This deal should provide a bankable template for future privately funded wind projects, and send a signal that Pakistan’s wind sector is attractive for private sector investment and financing.”


“We estimate that three to five projects will come on line following ADB’s support for Zorlu Enerji’s wind farm,” said Siddhartha Shah, Senior Investment Specialist in ADB's Private Sector Operations Department.


The existing 6 megawatt wind farm project is currently dispatching power to the Hyderabad Electric Supply Company. Once the second construction phase is complete – expected in 2012 – the 56.4 megawatt wind farm will supply power to the national grid through a 20-year take-or-pay power purchase agreement with the National Transmission and Dispatch Company. The approved tariff will ensure that the electricity is priced competitively, with the rate dropping over time as project debt is paid down.

“The project will have multiple benefits including helping realize the government’s target of 6% renewable energy in the total power mix by 2030, and contributing to employment opportunities and economic growth in one of the poorest regions of the country,” said Mr. Shah.

The total cost of the project is $147 million with 30 per cent financed through equity provided by Zorlu Enerji and the rest through US dollar-denominated loans from ADB, the International Finance Corp., the ECO Trade and Development Bank and a Pakistan rupee loan from Habib Bank. ADB’s loan will carry a tenor of 12 years with a two-year grace period.