IFC invests $35m in Pakistan’s first greenfield sustainable aviation fuel facility

The International Finance Corporation (IFC) is offering up to $35m in equity and debt financing to SAFCO Venture Holdings Limited (SAFCO Ventures) to support the development of Pakistan’s first greenfield sustainable aviation fuel (SAF) facility. This facility will convert thousands of tonnes of used cooking oil and other waste oils into aviation fuel, contributing to the reduction of global emissions.

“We are pleased to collaborate with IFC in setting up this important facility in Pakistan,” said Ali Shaikh, Founder and CEO of SAFCO Ventures. “We believe we are strategically positioned to scale up SAF production, while fostering a more efficient and sustainable feedstock oil value chain in the country.”

How will this investment help with SAF

IFC’s investment, mostly in the form of long-term patient equity capital, has been instrumental in anchoring this project and financing a nascent sector. The project is expected to help promote a circular economy in Pakistan, create jobs, and support export-led growth.

SAF, a biofuel made from renewable biomass and waste resources, can reduce life cycle greenhouse gas (GHG) emissions by up to 94 percent compared to conventional jet fuel. The transport sector accounts for about a quarter of global greenhouse gas (GHG) emissions, with aviation contributing 13.9 percent of these emissions, making it the second-largest source of emissions in the sector after road transport. Producing SAF is therefore expected to help reduce global emissions.

The new 200,000 tons-per-annum (TPA) facility in Sheikhupura, Punjab will collect 250,000 tons of feedstock oil annually and convert it into SAF, helping to reduce more than 500,000 tons of CO2 annually. It is also expected to create 300 direct jobs through the transfer of technology and technical training and lead to an estimated 20,000 indirect jobs in the waste-to-fuel value chain, while generating foreign exchange revenue for Pakistan through SAF exports. 

IFC’s $35m financing package comprises $30m equity and $5m debt. Of the total equity contribution, $20m is from its own account and an additional investment of up to $10m is from a climate-related blended finance program (CIFPAK) that was recently launched in partnership with the UK Foreign Commonwealth & Development Office.