ADB offers $44m loan guarantee to Pak firm
ISLAMABAD — The Asian Development Bank (ADB) has offered a commercial loan guarantee of $44 million to Pakistan's Fauji Foundation and make a direct investment of $2.75 million to become a minority shareholder in the setting up of gas fired power plant.
The objective is to help set up a plant that will provide additional low-cost electricity to consumers to address the growing power shortages.
The Bank will become investment partner with Fauji Foundation through a combination of $47 million investment and loan to set up a 171-MW gas based combined cycle power project in Daharki, in Sindh's Ghotki district.
According to a Bank's announcement, the ADB estimates that Pakistan will need to add power generation capacity by 2000 MW every year to avoid power shortages.The 171-MW combined cycle project will use low-BTU (non-pipeline quality) gas to feed electricity to the national grid. Gas will be supplied from the nearby Mari gas fields, of Mari Gas Company Limited (MGCL) that too is owned by Fauji Foundation. The power plant will increase the net electricity generation capacity of Pakistan which should help reduce constraints on economic growth caused by power shortages. About 60 per cent population in Pakistan have access to electricity from the national grid. The rest of the population use kerosene, wood and other bio-fuels for lighting, cooking and heating.