Islamabad (TDI): The Asian Development Bank (ADB) and SAFCO Venture Holdings Limited have inked an $86.2 million deal to fund the construction and operation of a sustainable aviation fuel (SAF) facility in Sheikhupura, Pakistan.
This marks the first private sector-led SAF initiative in Asia and the Pacific.
The financing includes 41.2 million dollars from ADB’s ordinary capital resources, along with 45 million dollars in syndicated loans, including B-loans from The Emerging Africa & Asia Infrastructure Fund.
The International Finance Corporation is also providing a syndicated parallel loan.
The Asian Development Bank will serve as the lender of record and lead arranger for the financing.
Suzanne Gaboury, ADB’s Director General for Private Sector Operations, stated that the new facility would be a significant step towards decarbonizing the aviation sector, which faces limited decarbonization options, especially for large aircraft.
Project Aims to Promote Renewable Fuels in Pakistan
The project aims to promote renewable fuels in Pakistan, reflecting ADB’s commitment to supporting sustainable solutions for climate change.
SAFCO’s CEO, Ali Shaikh, highlighted the initiative’s potential to create jobs and significantly reduce greenhouse gas emissions, marking a historic partnership between Axens, Rothschild & Co, and SAFCO in Pakistan.
The 200-kilotons per annum SAF facility will utilise waste-based feedstock, including used cooking oil.
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Shell Eastern Trading has signed a long-term offtake agreement with SAFCO to purchase up to 145,000 tons of SAF annually once the facility is operational.
The facility, set to produce 145,000 tons of SAF and eighteen thousand tons of bionaphtha annually, is likely to reduce carbon dioxide emissions by up to 500,000 tons per year.
This project is the first SAF initiative funded by ADB and marks a major milestone for private sector-led SAF production in the region.
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The financing is supported by ADB’s Innovative Finance Facility for Climate in Asia and the Pacific (IF-CAP), a pioneering climate finance mechanism.
ADB’s commitment to sustainable development in Asia continues as the bank strives to promote inclusive growth and tackle climate change challenges in the region.
