The FINANCIAL — IFC, a member of the World Bank Group has ramped up investments in Pakistan over the past year, with a focus on renewable energy to address the country’s power shortage, and loans to banks to boost financial inclusion, especially for small and medium enterprises (SMEs).
IFC committed a total of $1.2 billion investments in the country in fiscal year 2015 (of which $767 million was in long-term finance projects), backing private sector investments in key projects to strengthen the country’s private sector and boost development and growth, according to IFC.
“Millions of people in Pakistan lack access to power or basic financial services,” said Nadeem Siddiqui, IFC Country Manager for Pakistan. “Our aim is to help tackle both by providing new cleaner energy sources to spur development and strengthen the country’s financial sector to boost inclusion and shared prosperity.”
In one of its biggest equity investments in the country, IFC invested $125 million in China Three Gorges South Asia, to support a series of hydro, solar and wind projects that are expected to provide electricity to more than 11 million people and boost generation capacity by 15 percent.
To cut Pakistan’s reliance on imported fossil fuels and further support lower cost energy regeneration, IFC invested a total of $205 million, including mobilization of $155 million from MIGA and other lenders, in the Gulpur Hydro project, a new hydropower plant, and invested $15 million in Gul Ahmed Wind Power to help build and operate a new 50-megawatt wind farm in Sindh Province.
To boost financial inclusion, IFC provided a loan of up to $150 million to Pakistan’s Habib Bank Ltd, as well as an equity investment of $75 million, to support its growth and help the bank launch programs targeting women depositors, and agricultural and rural borrowers.
IFC also invested $67 million in to help Bank Alfalah, one of Pakistan’s largest banks, grow its operations and increase lending to SMEs and the agri-sector, as well as explore new areas like sustainable energy finance.
Pakistan represents IFC’s largest exposure in the MENA region, with a current investment portfolio of about $1.2 billion in 46 companies, in sectors including infrastructure (energy, ports, and transport), financial markets, and general manufacturing and services.
