Project Description
On May 31, 2013, MIGA issued a guarantee of $72 million covering an investment by Stora Enso South Asia Holdings AB of Sweden in Bulleh Shah Packaging (Private) Limited in Pakistan. The coverage is for a period of up to 15 years against the risks of transfer restriction, expropriation, and war and civil disturbance.
The project entails the investment in a newly formed joint venture limited liability company, Bulleh Shah Packaging (Private) Limited. The investment will be made by Stora Enso Oyj, Finland, via its wholly owned subsidiary, Stora Enso South Asia Holdings AB, Sweden and Packages Limited of Pakistan. The joint venture will own and operate Packages Limited’s paper, paperboard, and corrugated carton mills in Kasur and Karachi.
The joint venture sponsors intend to undertake an investment program to rebuild and increase the capacity of the existing facilities and set up a bio-energy plant to create a sustainable source of energy for their operations.
The project will ensure the continued sustainability of assets that currently provide direct employment to nearly one thousand people. The sponsors’ investments will expand capacity, introduce greater efficiencies, widen product application, and enhance product quality. This will create the potential for the project to grow its customer base.
The planned investment program is expected to create 840 jobs for local hires during the construction period in addition to the staff currently employed by the mills. Most of these jobs are expected to be created around the Kasur region, which is relatively underdeveloped. The project will train key local personnel to ensure transfer of technical skills.
Benefits that accrue along the supply chain will include locally-sourced wastepaper and biofuels (wheat straw)—both of which provide additional income sources to the local farming community and people involved in the collection, distribution, and supply of wastepaper.
Packages Limited has undertaken various community development projects including supporting local schools by renovating buildings and providing safe drinking water and sanitary facilities. The company also arranges medical services for employees and the surrounding community, grants educational scholarships, and organizes professional training, sports events, and festivals. The project puts a process and organization in place to map the supply chains, identify social issues, and develop further actions to strengthen the communities that are impacted by the project.
MIGA’s support for this investment is aligned with the World Bank Group’s country partnership strategy for Pakistan, particularly with regard to providing employment opportunities.
MIGA’s participation in the project is also aligned with a key agency priority, encouraging investment in countries eligible for concessional lending from the International Development Association.
