IFC leads financing for $89m Mazar power plant in Afghanistan
The International Finance Corporation, Germany's DEG, and the Asian Development Bank have agreed financing for the Mazar-e-Sharif gas-to-power plant in northern Afghanistan - the country's first long-term public-private partnership.
IFC’s financial support from its own resources for the $89 million project includes a $21.2 million senior loan and $1.5 million of client risk-management swap. In addition, as the mandated lead arranger for the project, IFC has mobilized $41.2 million in parallel loans from other lenders, including Deutsche Investitions- und Entwicklungsgesellschaft (DEG) and the Asian Development Bank.
The Multilateral Investment Guarantee Agency will provide investment guarantees amounting to $48.7 million. IFC’s financing and MIGA’s political risk guarantees will be covered in part by the International Development Association Private Sector Window’s Risk Mitigation Facility, as well as the MIGA Guarantee Facility. The project marks the first time the PSW’s Risk Mitigation Facility has been used. The Asian Development Bank has agreed a $10 million loan for the project, which will be implemented by Afghan Power Plant Company - a special purpose vehicle owned by Ghazanfar Group - and Egyptian construction company Hassan Allam Holdings.
The World Bank Group’s financing package includes a $12 million guarantee from the International Development Association to help provide short-term liquidity support for ongoing payment obligations to the power utility, Da Afghanistan Breshna Sherket, which will buy the power generated from the plant.
The greenfield power plant, which will use gas from the Sheberghan gas fields located in the same region of the country, is expected to generate around 400GWh of electricity annually for the residents of Mazar-e-Sharif, Kabul, and Jalalabad.
