IFC invests in $35m in Pakistan’s first SAF facility
The International Finance Corporation (IFC) has announced a $35m in equity and debt financing to SAFCO Venture Holdings Limited (SAFCO Ventures) to establish Pakistan’s first sustainable aviation fuel (SAF) facility.
“As IFC’s first investment in sustainable aviation fuel production, it also sets the tone for similar IFC investments in this space as well as for other financiers to follow suit,” said Ashruf Megahed, regional industry head for manufacturing, agribusiness and services for the Middle East, Central Asia, Türkiye, Pakistan, and Afghanistan.
IFC’s $35m financing package comprises $30m equity and $5m debt. Of the total equity contribution, $20m is from its own account and an additional investment of up to $10m is from a climate-related blended finance program (CIFPAK) that was recently launched in partnership with the UK Foreign Commonwealth & Development Office.
The IFC’s investment, long-term patient equity capital, in the project aims to convert thousands of tons of used cooking oil and other waste oils into environmentally friendly aviation fuel, significantly reducing greenhouse gas emissions.
The new 200,000-ton-per-annum facility in Sheikhupura, Punjab, will process 250,000 tons of feedstock oil annually, preventing the release of over 500,000 tons of CO2 into the atmosphere.
Additionally, the project is expected to create 300 direct jobs and 20,000 indirect jobs in the waste-to-fuel value chain, while also generating foreign exchange revenue through SAF exports.
“We are pleased to collaborate with IFC in setting up this important facility in Pakistan,” said Ali Shaikh, Founder and CEO of SAFCO Ventures. “We believe we are strategically positioned to scale up SAF production, while fostering a more efficient and sustainable feedstock oil value chain in the country.”
The facility, the first-of-its-kind in South Asia, will be managed by Safco OPCO, a subsidiary of SAFCO Ventures. Biotech Energy (BTE) another subsidiary of Safco Ventures, currently manages Pakistan’s first-large scale biodiesel refinery as well as one of its largest oil feedstock collection networks.
The facility will produce SAF and Bionaphtha, a raw material to produce sustainable plastic products.