IFC is providing up to $35 million in equity and debt financing to SAFCO Venture to help establish Pakistan's first greenfield sustainable aviation fuel (SAF) facility. The facility will convert used cooking oil and other waste oils into aviation fuel.
The investment is mostly in the form of long-term patient equity capital. The financing comprises of $30 million equity and $5 million debt. Of the total equity contribution, $20 million is from its own account and an additional investment of up to $10 million is from a climate-related blended finance programme (CIFPAK). The CIFPAK was recently launched in partnership with the UK Foreign Commonwealth & Development Office.
"As IFC’s first investment in sustainable aviation fuel production, it also sets the tone for similar IFC investments in this space as well as for other financiers to follow suit,” said Ashruf Megahed, regional industry head for manufacturing, agribusiness and services for the Middle East, central Asia, Türkiye, Pakistan, and Afghanistan.
The new 200,000 tonnes-per-annum facility in Sheikhupura, Punjab, will collect 250,000 tonnes of feedstock oil annually and convert it into SAF.