The International Finance Corporation (IFC), a member of the World Bank Group, is to acquire a 15 per cent stake in China Three Gorges South Asia (CSAIL) to support development of a number of renewable energy projects in Pakistan.
IFC will invest $125 million in CSAIL, a subsidiary of China Three Gorges Corporation (CTGC), which plans to build a series of hydro, solar and wind power projects that will provide electricity to more than 11 million people, boost generation capacity by 15 per cent, and cut the country's reliance on imported fossil fuels.
The projects are part of efforts in Pakistan to combat climate change and encourage economic growth.
"Pakistan is one of the most important overseas markets of CTGC," said Lu Chun, CTGC Chairman. CSAIL will invest $7 million in Pakistan, the largest investment in the history of the country's power sector.
CSAIL has already completed a 50 MW wind farm and has six other renewable projects in its pipeline, including three large hydropower projects. Once completed, those projects will boost the country's output of renewable energy by a third.
"Power shortages hinder social and economic development in Pakistan, despite the country's significant renewable energy potential," said Dimitris Tsitsiragos, IFC Vice President for Global Client Services. "This partnership fits with IFC's strategy of encouraging investments in emerging markets to transfer knowledge and expertise, and help make major projects a reality. The project will increase the share of power generation in Pakistan and encourage other investors."
IFC's investment in CSAIL forms an integral part of the World Bank Group's 'Transformational Energy Initiative' for Pakistan, which aims to mobilize investments of up to $10 billion over the next five years to address the country's power shortage.