International Finance Corp. is making an equity investment in, as well as providing as much as a $20 million loan to Engro Elengy Terminal Private Ltd. for Pakistan’s first LNG import terminal, the World Bank affiliate reported.
IFC said its investment will go toward design, construction, and operation of the $125-million Elengy terminal at Port Qasim near Karachi. The terminal will use a floating storage and regasification unit provided by US-based Excelerate Energy, and is expected to handle up to 4.5 million tonnes/year of LNG, which IFC said will help ease the country’s crippling power shortages and reduce its reliance on expensive diesel and heavy fuel oil imports.
“Importing natural gas is a more economically viable source for power generation, especially when Pakistan’s indigenous gas resources are diminishing,” Engro Corp. Chief Executive Khalid Subhani said. “The new facility will also help diversify Pakistan’s fuel supply mix and open one of the largest gas markets in Asia to the global LNG market.”
IFC said that power outages are estimated to cost the equivalent of 7%/year of Pakistan’s gross domestic product, with blackouts and brownouts lasting up to 8 hr in urban areas and even longer in rural areas. It said in the latest enterprise survey conducted in Pakistan, the absence of a reliable electricity supply was cited by two thirds of business owners and managers as the top constraint facing firms in the country.
The project is part of IFC and the World Bank Group’s strategy to mobilize as much as $10 billion in investments to address Pakistan’s power shortage, IFC said. The country represents IFC’s second largest country exposure in the Middle East and North Africa, where IFC said it has committed more than $5.2 billion so far. It said that in the next few years, IFC expects to invest about $500 million/year in Pakistan, with a focus on infrastructure, particularly renewable and low-cost power; financial markets, agribusiness, manufacturing, and services.
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