WASHINGTON, D.C., Jan. 24 -- The International Finance Corporation (IFC) today signed its first private sector power agreement in Pakistan to provide up to US$67.9 million to Kohinoor Energy Limited to build, own, and operate a 120 megawatt (MW) power plant to be located near the city of Lahore. IFC's financing consists of loans amounting to US$61.6 million, including US$36.6 million for the account of participants. IFC will also subscribe 15 percent in the share capital of the company for about US$6.3 million. The total project cost is US$138.6 million. Kohinoor will be one of the first fast-track projects to be built under the new policies of the Government of Pakistan to encourage private investment in power generation by providing attractive returns to investors. Partial operations are expected to begin in October 1996 and full operations in March 1997. The project sponsors are the Saigol family, a leading Pakistani business group, and Tomen Corporation, a Japanese trading company. The plant will be power
ed by eight 15 MW diesel engines operating on heavy fuel oil, and a 6 MW steam turbogenerator powered by exhaust gas. Wärtsilä Diesel Oy of Finland will supply the engines and the steam turbine. Tomen will provide overall project supervision, design, and construction. Together, Tomen and Wärtsilä will deliver the plant on a fixed price turnkey basis with guaranteed output and fuel consumption. Wärtsilä will operate the plant under contract for at least four years after completion. The Water and Power Development Authority (WAPDA), a state owned utility, will purchase the project's capacity and energy under a 22-year Power Purchase Agreement. Pakistan State Oil (PSO), the state owned petroleum company, will supply fuel for the same 22-year period under a Fuel Supply Agreement. The project will meet the World Bank's and Pakistan's environmental guidelines. "Having worked closely with the Government of Pakistan in defining a greater role for the private sector in power generation, IFC is pleased to be associated
with this project," said Mr. Jannik Lindbaek, Executive Vice President of IFC, when he signed the agreement with Mr. Nasim Saigol, Chairman of the Saigols Group, in Lahore. Mr. Lindbaek added, "Since diesel plants can be built in less than two years, they present an economic solution to alleviate the present power shortage problem. We hope this project will set the stage for future private power transactions in Pakistan." IFC is a member of the World Bank Group and is the largest multilateral source of equity and loan financing for private sector projects in developing countries.
