ADB, SAFCO to invest $86.2m to boost SAF production in Pakistan

The Asian Development Bank (ADB) and SAFCO Venture Holdings Limited (SAFCO) have teamed up to invest $86.2m financial package to construct and operate a sustainable aviation fuel (SAF) facility in Sheikhupura, Pakistan.

This initiative marks the first private sector-led SAF project in the Asia-Pacific region.

“The aviation sector has limited decarbonization options, large aircraft are unlikely to depend on electric or fuel-cell technology in the near future and this new facility is a significant step towards decarbonising this hard-to-abate sector,” said ADB director general for private sector operations Suzanne Gaboury.

“The assistance will promote the development of the renewable fuels market in Pakistan, exemplifying ADB’s commitment as Asia and the Pacific’s climate bank to support innovative and sustainable solutions that fight climate change.”

The financing package, comprising $41.2m from ADB’s ordinary capital resources and $45m in syndicated loans, will develop a 200-kiloton-per-annum SAF facility in Sheikhupura using waste-based feedstock, primarily used cooking oil.

“ADB’s financing represents a significant advance towards a sustainable future for the global aviation sector, promoting cutting-edge technology, job creation, and substantial reductions in greenhouse gas emissions. This landmark initiative brings together Axens, Rothschild & Co with SAFCO for the first time in the country’s history,” said SAFCO CEO Ali Shaikh.

Shell Eastern Trading (Pte) Ltd has entered into a long-term offtake agreement with SAFCO, securing the purchase of up to 145,000 tons of SAF annually.

SAFCO Venture Holdings Limited currently operates a 50,000 tons per annum biodiesel manufacturing facility in Sheikhupura through its subsidiary.