InfraCo Asia exits 100MW Pakistan wind farms

Korean investor Daelim Energy buys the two facilties in its debut deal in the country as it looks to bolster its global power portfolio.

InfraCo Asia has sold its stakes in two wind farms in Pakistan to Korean energy company Daelim Energy for an undisclosed sum.

Allard Nooy, chief executive of the Singapore-based greenfield-focused investor, told Infrastructure Investor that the transaction, which was completed last month, made a “good return”, given such a short turnaround period. He declined to disclose further transaction details, but noted that the capital raised from the sale will be reinvested in future infrastructure projects.

The transaction marks Daelim’s debut in Pakistan. The firm, part of Korean construction company Daelim Group, has identified a shortfall in Pakistan’s energy provision and the move forms part of its plan to have more than 10GW of total global power capacity by 2020.

The power capacity shortfall in Pakistan stands at more than 5GW, which is about one-third of the total demand on the electricity system, InfraCo Asia noted.

The Metro and Gul Ahmed wind farms, each with 50MW capacity, have a combined project cost of $262.5 million which was funded through both domestic and foreign debt and equity.

InfraCo Asia and its sister facility InfraCo Asia Investments provided $15.6 million and $18.1 million, respectively, throughout the development of the two projects since 2012. InfraCo Asia is backed by the UK, Swiss and Australian governments, with a mandate to take on the early-stage risks of infrastructure project development in South and Southeast Asia.

It began developing the projects with local sponsors, the Alimohamed Family and Gul Ahmed Energy, and was later joined by the International Finance Corporation as a lender and equity shareholder. Financings also came from the Netherlands’ FMO, France’s Proparco, and four Pakistani commercial banks.

Both the wind farms, which commenced operations in the second half of last year, lie in Pakistan’s Jhimpir Wind Corridor. The projects have secured a 20-year power purchase agreement with a local renewable energy authority.

InfraCo Asia has fully exited the projects, while local sponsor partners retain their stakes. The IFC also continues to hold a minority stake of 9.9 percent in one of the projects.