IFC, a member of the World Bank Group, will invest $100m in the 720MW Karot run-of-river hydropower project in Pakistan.
Planned to be built on the Jhelum River and the Province of Punjab, Pakistan, the $1.7bn Karot hydro project is designed to help address the severe power deficit in the country.
The project, which is scheduled to be commissioned by 2021, represents one of the three hydropower projects being developed in the country by China Three Gorges South Asia Investment, an independent power company established by CTGC, IFC and Silk Road Fund.
The funding marks IFC’s first finance engagement with China Three Gorges.
IFC Infrastructure and Natural Resources global director Bernard Sheahan said “Improving access to electricity in Pakistan is a priority for IFC and the World Bank Group, and we are pleased to see the Karot project advance.
“Our priority has been to support the sponsor and the company in the project’s development by strengthening their environmental, social, and corporate governance capabilities, to ensure power is delivered sustainably.”
The IFC’s investment in the project represents its first major collaboration with China Export Import Bank, China Development Bank, and Silk Road Fund.
The Karot plant is expected to generate about 2970GWh of net energy annually, required to power 3 million residential customers.
The project is expected to contribute to the joint World Bank Group Transformational Energy Initiative and Joint Implementation Plan in Pakistan.
The program is intended to raise $10bn for investments in new power generation projects to address acute power shortage in the country.