Meezan Bank, Pakistan’s leading Islamic bank and Burj Solar Energy Private Limited (BSEPL) have announced the financial close of Rs1 billion syndicated Islamic finance facility for BSEPL’s portfolio of renewable distributed power generation in Pakistan, a statement said.
The first tranche of Rs580 million will be used to finance the construction of 7MW solar power plant for Power Cement Limited on Karachi-Hyderabad Motorway. Meezan Bank led the transaction as the mandated lead arranger and Pakistan Kuwait Investment Company (Private) Limited participated as the co-arranger.
The transaction structure is based on the State Bank of Pakistan’s (SBP) Islamic financing facility for renewable energy (IFRE) and a commercial facility.
The solar power plant will be rented to the Power Cement Limited under a 20-year equipment rental agreement and the solar energy generated will be used by the company’s cement plant in Nooriabad. It will generate 220GWh solar units for 20 years and in addition to reducing the cost of electricity, will offset 112,000 tonnes of CO2 GHG emissions.
The project is expected to start generation in July, 2022. Legal counsel for the financiers were Mohsin Tayebaly and Co, while Kabraji and Talibuddin Advocates will act as the legal counsels. Orient Energy Systems (Private) Limited is the turnkey EPC contractor for the project.
Ariful Islam, deputy chief executive officer of Meezan Bank, said: “Meezan Bank is committed to actively support and pursue green energy initiatives. The bank has played a key role in the financing of several renewable energy projects, aggregating to 380MW, as lead or co-lead manager and also participated in the debt syndications of two large hydroelectric projects being set-up by the government of Pakistan – Neelum Jhelum and Dasu.”
“Burj Energy is an excellent initiative that will facilitate distributed affordable solar initiatives for corporates, Small and Medium Enterprises, as well as the individual consumers,” he added.
Meezan Bank has also implemented a number of green initiatives by installing solar at 59 branches and 140kW solar at its head office. Its new regional office building in Islamabad is also being designed to be Platinum Lead certified.
Saad Zaman, chairman of BSEPL, and Burj Energy International Management Limited, UAE, said: “I am very pleased that we have successfully reached the financial close of the 7MW solar farm for Power Cement Limited.”
“This is another success for our company and a significant moment for the development of hybrid renewable energy projects in Pakistan. This successful financial close reflects the ongoing interest and trust of the leading financial institutions in the Pakistani renewables’ market and Burj Group,” he added.
Kashif Habib, chief executive officer of Power Cement Limited, said: “Our future is dependent on green, sustainable and renewable source of energy. By installing this 7MW solar farm, we are taking the first step towards our hybrid solar and wind energy project.”
“We shall keep playing our part in making our production process more environment-friendly and positively impactful for the ecosystem we live in. It is high time that we look towards other viable energy options that are clean and green,” he added.