ISLAMABAD: The Asian Development Bank (ADB) signed an agreement on Wednesday to provide $86.2 million in financing to a waste-based aviation fuel-producing plant in Sheikhupura.
In a statement, the ADB said it signed with SAFCO Venture Holding Ltd “a landmark $86.2m financial package to finance the construction and operation of a sustainable aviation fuel (SAF) facility in Sheikhupura — the first private sector-led SAF initiative in Asia and the Pacific.
The financing includes $41.2m from ADB’s ordinary capital resources (OCR) and $45m in syndicated loans, including B-loans from The Emerging Africa & Asia Infrastructure Fund—an emerging market infrastructure debt fund owned by PIDG and managed by NinetyOne and ILX—an Amsterdam-based emerging market asset manager focused on SDG and climate private debt strategies. The International Finance Corporation is providing a syndicated parallel loan. ADB serves as the lender of record for the B-loans and the mandated lead arranger and book-runner for the financing package.
The initiative brings together Axens, Rothschild & Co with SAFCO for the first time in the country’s history.
“The aviation sector has limited decarbonisation options, large aircraft are unlikely to depend on electric or fuel-cell technology in the near future and this new facility is a significant step towards decarbonising this hard-to-abate sector,” said ADB Director General for Private Sector Operations Suzanne Gaboury.
“The assistance will promote the development of the renewable fuels market in Pakistan, exemplifying ADB’s commitment as Asia and the Pacific’s climate bank to support innovative and sustainable solutions that fight climate change.”
SAFCO’s Chief Executive Officer Ali Shaikh said the ADB’s financing represented a significant advance towards a sustainable future for the global aviation sector, promoting cutting-edge technology, job creation, and substantial reductions in greenhouse gas emissions.
The 200-kilotons per annum
SAF facility in Sheikhupura will use waste-based feedstock including used cooking oil.
Shell Eastern Trading (Pte) Ltd has signed a long-term offtake agreement with SAFCO for volumes of up to 145,000 tonnes a year of SAF from the SAF facility in Pakistan, once the proposed plant is complete.
Published in Dawn, December 5th, 2024
