World Bank backs Pakistan's renewable energy proejct
The Multilateral Investment Guarantee Agency (MIGA), the World Bank's political risk insurance and credit enhancement arm, will provide investment guarantees for a hydropower project in Pakistan to help reduce the country's severe energy shortage.
MIGA has issued guarantees totalling US$82.7 million to Korea South East Power Co Ltd (KOSEP), Daelim Industrial Co. Ltd., and Lotte Engineering and Construction Co. Ltd. for their equity investments into Mira Power Limited. The guarantees support construction, operation, and maintenance of a 102-megawatt run-of-the-river hydropower plant. MIGA is providing coverage for up to 15 years against the risk of breach of contract.
The Gulpur Hydro Power project will provide additional power generation at a time when Pakistan is facing a critical power deficit, and will produce this electricity at a lower cost than imported heavy fuel oil and other renewable alternatives. The country's power shortage has been a binding constraint on industrial activity and economic growth.
Additionally, the project will promote private sector investment in Pakistan's hydropower sector and support the government's efforts to accelerate the development of hydropower capacity nationally.