Pak-Arab Fertilisers (Pvt) Limited, a joint venture of Arif Habib group and Fatima group, concluded a major financing deal worth $22 million with DEG - Deutsche Investitions-und Entwicklungsgesellschaft mbH, a renowned development financial institution of Germany to finance the establishment of Pak-Arab's new co -generation power plant.
Based on modern gas turbines technology Pak-Arab's new power plant would have the capacity to produce 34 MW (ISO condition) of electricity besides generating 150 tonnes of steam per hour, a spokesman of Pak-Arab Fertilisers said here on Friday.
According to him, this would be a highly fuel-efficient plant, which would save huge operating costs of the company. The plant is also being registered with United Nations as CDM project.
Fawad Ahmed Mukhtar, CEO of Pak-Arab said: "This landmark transaction is indicative of our strength. We are also the first company in Pakistan to be approved by United Nations for installing a CDM project under Kyoto protocol mechanism in joint venture with Mitsubishi Corporation of Japan for abatement of Nitrous Oxide gases."
It may be mentioned that Pak-Arab managed to clear DEG's stringent social, environmental, health, and safety standards to avail this financing. This major financing deal speaks of the confidence and creditability, which the sponsors of Pak-Arab enjoy in the domestic and international financial market.
According to spokesman, Herbert Baumgartner, Vice President of DEG said: "To date, long-term financing is hardly available in Pakistan. This is why DEG, one of the largest European development finance institutions, has an important subsidiary role. Besides, the project fits in the field of climate protection in which DEG increasingly aims at new commitments."
The spokesman said that this deal could be termed as yet another milestone in the history of the company, which was privatised last year and taken over by the current management. The CDM project will contribute substantially to the company's earnings and valuable foreign exchange for the country by sale of Certified Emission Reductions (CERs) in the international market.
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