The Asian Development Bank is supporting the construction of Pakistan's first privately financed wind farm with the provision of a $36.8 million loan for developer Zorlu Enerji Electrik Uretim.
The wind project in Pakistan's southern Sindh province will provide much-needed additional power for Pakistan and will serve as a template for future developments, says the ADB.
The loan will be used to install wind turbines to expand an existing wind power installation from its current 6 MW to 56.4 MW. The ADB's support of the project will result in a further three to five wind power projects being brought on-line, according to the bank.
“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.”
Pakistan relies heavily on imported fossil fuels for the bulk of its energy needs. However, this is costly, puts a heavy burden on Pakistan's foreign exchange reserves, and leaves the country vulnerable to supply disruptions and global price fluctuations.
The government of Pakistan is now engaged in a major drive to expand its energy sources, including tapping renewable energy resources such as wind, given that around 50 000 MW of capacity are available in the south of the country alone.
The existing 6 MW 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 MW 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 project will have multiple benefits including helping realize the government's target of six per cent 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 Siddhartha Shah, Senior Investment Specialist in ADB's Private Sector Operations Department.
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