Washington, DC, Seoul, July 13, 2015 – The Multilateral Investment Guarantee Agency (MIGA)—the political risk insurance and credit enhancement arm of the World Bank Group—announced today it is providing investment guarantees for a hydropower project in Pakistan to help reduce the country's severe energy shortage.
MIGA has issued guarantees totaling $82.7 million to Korea South East Power Co. Ltd. (KOSEP), Daelim Industrial Co. Ltd., and Lotte Engineering and Construction Co. Ltd. for their equity investments into Mira Power Limited. The guarantees support construction, operation, and maintenance of a 102-megawatt run-of-the-river hydropower plant. MIGA is providing coverage for up to 15 years against the risk of breach of contract.
The Gulpur Hydro Power project will provide additional power generation at a time when Pakistan is facing a critical power deficit, and will produce this electricity at a lower cost than imported heavy fuel oil and other renewable alternatives. The country's power shortage has been a binding constraint on industrial activity and economic growth.
Additionally, the project will promote private sector investment in Pakistan's hydropower sector and support the government's efforts to accelerate the development of hydropower capacity nationally.
"We thank the Government of Pakistan, which supported this project, and we promise to repay our gratitude by successfully generating and providing power for the country," said HeoYUP, President and CEO of KOSEP. He continued, "Also, we would like to thank MIGA for assisting us with lowering the project risk."
Keiko Honda, MIGA's Executive Vice President and CEO, said: "We are pleased to support this project that brings significant benefits to the people of Pakistan and helps bridge current supply gaps. The investment will also help address future needs and improve the sustainability of Pakistan's energy sector."
The International Finance Corporation signed financing for the project in May this year. The project forms part of a World Bank Group initiative in the country to support significant new investments and reforms in Pakistan's power sector involving a mix of public and private projects.
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MULTILATERAL INVESTMENT GUARANTEE AGENCY
A Member of the World Bank Group
1818 H Street, NW, Washington, DC 20433
Contacts
Mallory Saleson, MIGA
Tel: +1 202 473-0844
E-mail: msaleson@worldbank.org
Cara Santos Pianesi, MIGA
Tel: +1.202.458.2097
E-mail: csantospianesi@worldbank.org