Islamabad, Pakistan, July 26, 2021—A new investment will help increase the availability of hydrogen peroxide and boost competitiveness of the Polyvinyl Chloride (PVC) and base chemicals sector, while tackling climate change in Pakistan. IFC's $15 million investment in Engro Polymer & Chemicals Limited (EPCL) is also expected to create jobs, improve resource efficiency, and drive economic growth in the country.
IFC's support will allow EPCL—the only vertically integrated PVC and chlor-alkali producer in the country—to expand its product range to include hydrogen peroxide, supporting the growth of textile, buildings, and construction sectors in Pakistan. Further, IFC's long-term investment will contribute approximately $57 million to the nation's economy through efficient linkages to the local supply chain and an additional $28 million through induced effects.
IFC's funding will enable EPCL to reduce the usage of imported ethylene in the raw material mix for PVC production. While reducing PVC manufacturing costs, it will help the company enter the hydrogen peroxide market—with a capacity of 28,000 metric tons—as the lowest-cost producer in the country. The climate change mitigation project is also expected to reduce GHG emissions of around 23,074 tons of CO2-equivalent annually and 3,540,000 m3 of natural gas use annually.
"Our investment in EPCL will help in cost-efficient production of critical raw materials that are used across sectors in the economy, including construction, agriculture packaging, and fast-moving consumer goods. This will contribute to the sectors' growth momentum backed by a growing population, infrastructure development, and public infrastructure projects," said Nadeem Siddiqui, IFC Senior Country Manager for Pakistan. He added, "IFC's investment will also support resource efficiency—through raw materials savings—at the firm level while reducing the usage of oil-based products at the sector level."
"I'd like to express my gratitude to IFC which, with the recent financing of $15M, has displayed both confidence in, and support for, Engro Polymer's growth. We value IFC as a key stakeholder and partner and look forward to continue a mutually beneficial relationship with IFC's involvement in the company's future projects," said Mr. Jahangir Piracha CEO of EPCL.
IFC's advisory services will help EPCL reduce its carbon footprint and help the company develop a carbon neutrality strategy under the Global Climate Platform and Pakistan Resource Efficiency Advisory projects. EPCL is a subsidiary of Engro Corporation Limited, a strategic IFC client for nearly three decades. IFC's current outstanding exposure to all entities of Engro Corporation stands at $53.5 million.
IFC—a member of the World Bank Group—is the largest global development institution focused on the private sector in emerging markets. We work in more than 100 countries, using our capital, expertise, and influence to create markets and opportunities in developing countries. In fiscal year 2020, we invested $22 billion in private companies and financial institutions in developing countries, leveraging the power of the private sector to end extreme poverty and boost shared prosperity. For more information, visit www.ifc.org