IFC to finance Pakistan’s first greenfield sustainable aviation fuel (SAF) facility
The International Finance
Corporation (IFC) is providing up to $35 million in equity and debt financing
to SAFCO Venture Holdings Limited (SAFCO Ventures) for the establishment of
Pakistan’s first greenfield sustainable aviation fuel (SAF) facility. The
facility will convert thousands of tons of used cooking oil and other waste
oils into aviation fuel, contributing to a significant reduction in global
emissions.
According to the press release, the
financing—primarily long-term equity capital—will help develop this emerging
sector. It is expected to foster a circular economy in Pakistan, create jobs,
and stimulate export-led growth.
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Sustainable Aviation Fuel’s
Environmental Impact
SAF, a biofuel produced from renewable biomass and waste, can reduce lifecycle
greenhouse gas (GHG) emissions by up to 94% compared to conventional jet fuel.
The transport sector is responsible for approximately a quarter of global GHG
emissions, with aviation accounting for 13.9% of this, making it the
second-largest emitter after road transport. SAF production will play a crucial
role in addressing these emissions.
Details of the New Facility
The new 200,000-ton-per-year facility, located in Sheikhupura, Punjab, will
process 250,000 tons of feedstock oil annually. This will be converted into
SAF, cutting CO2 emissions by over 500,000 tons annually. Additionally, the
project is expected to create 300 direct jobs through technology transfer and
training, along with around 20,000 indirect jobs in the waste-to-fuel value
chain, and generate foreign exchange through SAF exports.
IFC’s $35 million financing package
consists of $30 million in equity and $5 million in debt. Of the equity
contribution, $20 million comes from IFC’s own account, with up to $10 million
from the recently launched climate-focused blended finance program (CIFPAK), in
partnership with the UK Foreign, Commonwealth & Development Office.
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A Major Step for South Asia
The facility will be operated by Safco OPCO, a subsidiary of SAFCO Ventures.
Biotech Energy (BTE), another subsidiary, oversees Pakistan’s first large-scale
biodiesel refinery and one of the country’s largest oil feedstock collection
networks. The facility will not only produce SAF but also Bionaphtha, a raw
material for sustainable plastic production.
“We are thrilled to partner with IFC
on this transformative project in Pakistan,” said Ali Shaikh, Founder and CEO
of SAFCO Ventures. “We are well-positioned to scale SAF production and enhance
the country’s sustainable feedstock oil value chain.”
Ashruf Megahed, IFC’s Regional
Industry Head for Manufacturing, Agribusiness, and Services in the Middle East,
Central Asia, Türkiye, Pakistan, and Afghanistan, stated, “This project
demonstrates how fuel production can support a circular economy by utilizing
waste materials without affecting food production or water supplies. As IFC’s
first investment in SAF, it sets a precedent for future projects and encourages
other financiers to get involved.”
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Harnessing Local Waste for Biofuel
Pakistan generates over one million tons of collectable used oils annually,
including cooking oils and other waste, which can be converted into biofuel.
This abundant supply of waste oils will be key to the project’s success and
will contribute to developing a circular economy in the country.
Since 1956, IFC has invested
approximately $13 billion in Pakistan, supporting sectors such as renewable
energy, financial inclusion, infrastructure, agribusiness, manufacturing,
housing, healthcare, and trade.
Source: https://www.chinimandi.com/