Active Mixed AidData Chinese Aid

[CPEC, IPP] ICBC pledges to provide a $66.34 million loan for 50 MW Wind Power Project

$66.34M USD

Funder	Industrial and Commercial Bank of China (ICBC)
Recipient Organization	Western Energy (Pvt.) Ltd.
Country	Pakistan
Start Date	Jan 01, 2017
End Date	May 08, 2030
Duration	4,875 days
Number of Grantees	1
Roles	Recipient
Data Source	AidData Chinese Aid
Grant ID	`53699`

Grant Description

[CPEC, IPP] ICBC pledges to provide a $66.34 million loan for 50 MW Wind Power Project In 2017, the Industrial and Commercial Bank of China (ICBC) pledged a $66.34 million loan to Western Energy (Pvt.) Limited — a project company (special purpose vehicle) — for a 50 MW Wind Power Project in Jhimpir, Thatta District, Sindh Province.

The total project cost is $88.455 million and it is being financed with 75% debt and 25% equity.

Apart from ICBC’s 2017 loan pledge, China Eximbank provided an indicative lending term sheet to Western Energy (Pvt.) Limited for this project in 2015.

The project will be executed by Western Energy (Pvt.) Ltd., a special purpose vehicle and joint venture between Pakistan-based Tapal Group and China Shipbuilding Industry Corporation.

Shanghai Marine Diesel Engine Research Institute is the offshore EPC contractor and Sino Qiyao International (Pmts) Limited is the onshore EPC contractor. The 50MW Wind Power Project will rely on wind turbine for power generation. The project is listed as a China Pakistan Economic Corridor (CPEC) project.

As of October 31, 2018, the project still awaits the Letter of Intent (LOI) from the Pakistani government.

📋 Staff Comments

According to multiple, official sources, the Government of Pakistan has issued sovereign guarantees in support of all loans issued by Chinese state-owned banks for independent power projects (IPPs) in Pakistan (see https://www.fmprc.gov.cn/ce/cepk/chn/zbgx/t1735166.htm and http://pk.chineseembassy.org/eng/zbgx/202110/t20211010_9558510.htm and https://www.dropbox.com/s/bmx3w2b38o7guxm/Debt%20Pricing%20of%20IPPs%20%28002%29.pdf?dl=0). As such, AidData assumes that the loan captured in this record is backed by a sovereign guarantee from the Government of Pakistan.

📚 Sources & References

Western Energy (Pvt.) Ltd. 50MW Wind Power Project
TRF-417 WEPL 20-08-2018 13233-35.PDF
Generation License application of Western EPL.
Generation License Application of Western Energy
中国驻巴基斯坦使馆发言人就美方涉中巴经济走廊言论答记者问
We do not have China debt problem: Umar
Debt Pricing of IPPs (002) Loan applications and disbursements are still being received and processed as the projects continue to evolve. Ongoing monitoring and evaluation are in place to ensure project continuity.