Meezan, Burj solar announce financial close: Rs 1 bn Islamic finance facility for renewable energy power plants

KARACHI: Meezan Bank and Burj Solar Energy Private Limited have announced the financial close of the Rs 1 billion syndicated Islamic finance facility for BSEPL’s portfolio of power plants based on renewable energy sources in the country.

The first tranche of Rs 580 million will be used to finance the construction of a 7MW solar power plant for Power Cement Limited along the Karachi-Hyderabad motorway.

Meezan Bank led the transaction as the mandated lead arranger and Pakistan Kuwait Investment Company (Pvt) Limited participated as the co-arranger. The transaction structure is based on the State Bank of Pakistan’s Islamic Financing Facility for Renewable Energy and a commercial facility.

The solar power plant will be rented to Power Cement Limited under a 20-year equipment rental agreement and the energy generated will be used by the company’s cement plant in Nooriabad.

It will generate 220 GWh solar units for 20 years and in addition to reducing cost of electricity, will offset 112,000 tons of CO2 GHG emissions. The project is expected to start generation in July 2022.

Legal counsel for the financiers were Mohsin Tayebaly and Company while Kabraji and Talibuddin Advocates and Legal Counsels acted as BSEPL’s legal counsel. The Orient Energy Systems (Pvt) Limited is the turnkey EPC contractor for the project.

Speaking on the occasion, Ariful Islam, the deputy CEO of Meezan Bank, said his bank is committed to actively supporting and pursuing green energy initiatives. Meezan Bank has played a key role in financing of several renewable energy projects generating a total of 380MW, as lead or co-lead manager and also participated in the debt syndications of two large hydro-electric projects being set up by the federal government — Neelum-Jhelum and Dasu.

“Burj Energy is an excellent initiative that will facilitate distributed affordable solar corporates, small and medium enterprises as well as individual consumers,” he remarked.

Mr Islam said that Meezan Bank has also installed solar panels at its 59 branches and a 140Kw solar plant at its head office. The building of its new regional office in Islamabad is being designed to be Platinum Lead-certified.

Saad Zaman, chairman of the BSEPL and Burj Energy International Management Limited, UAE, described the occasion as another “success” for his company and a significant moment for development of hybrid renewable energy projects in Pakistan.

He said the successful financial close reflects the ongoing interest and trust of leading financial institutions in Pakistan’s renewables market as well as the Burj Group.

Kashif Habib, the chief executive officer of Power Cement Limited, said the future is dependent on green, sustainable and renewable sources of energy. He said that by installing the 7MW solar farm “we shall keep playing our part in making our production processes more environment-friendly and positively impactful for the eco-system we live in. It is high time that we look towards other viable energy options that are clean and green”.

Copyright Business Recorder, 2022