Abraaj Group acquires majority stake in Jhimpir Power

Vows to continue its role in bridging power supply gap in Pakistan

LAHORE: The Abraaj Group has announced that it has entered into a definitive agreement to purchase a majority stake in Jhimpir Power Limited from Burj Capital, a renewable power developer, through its funds.

In a statement released from Dubai on Wednesday, Abraaj said its energy professionals focused on investing in clean energy across growth markets would manage the project, through the construction phase to its implementation.

It emphasised that the group was keen to continue its active role in addressing the power supply gap in Pakistan, stemming from favourable macroeconomic growth drivers including a rising middle class, urbanisation and underinvestment in the energy sector.

Pakistan producing more than 1,000MW of clean energy

Recognising the importance of clean energy, the Pakistan government has also implemented a number of regulatory reforms to facilitate foreign and local investments in clean energy generation.

Additionally, “a long-term power purchase agreement executed with the Central Power Purchasing Agency, a tariff indexed to the US dollar and a sovereign guarantee strengthen the investment thesis for projects executed in Pakistan’s wind energy sector,” Abraaj said.

Commenting on the transaction, Abraaj’s Thematic Fund Business Managing Partner and Global Head Sev Vettivetpillai said: “Our investment in the Jhimpir wind corridor marks our second transaction under Abraaj’s dedicated clean energy platform. With a shortage of over 6,000MW and rising power consumption in Pakistan, we are excited by the sheer size of the clean energy infrastructure opportunity, enabling government policies and the potential of the Jhimpir wind corridor.”

USAID to make $60m available for clean energy

Jhimpir Power owns a 50-megawatt wind power project in the Jhimpir wind corridor in Sindh, Pakistan. The project achieved financial close in August 2016 and is expected to commence operations in the first quarter of 2018.

The Jhimpir wind corridor is an established area for wind projects with more than 550MW of capacity already operational and a further 1 gigawatts under the construction and development phase.

The project will be powered by General Electric (GE) wind turbines, with Huadong Engineering Corporation appointed as the engineering, procurement and construction (EPC) contractor and GE providing the overall operations and maintenance for the project.

The Abraaj Group, which has invested $1 billion in 10 investments in growth markets, entered into an agreement in October 2016 to divest its 66.4% shareholding in K-Electric to Shanghai Electric Power Company Limited, marking one of the largest private-sector transactions in Pakistan.