Project detail - ZEPHYR POWER (PVT) LTD.


Status: Approved investment
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The information as disclosed is indicative and provided on an "as-is/as available" basis for general informational purposes only and should not be construed as financial, legal or investment advice, nor as a commitment or an offer to arrange or provide any financing. The final decision to provide financing is subject to the terms and conditions of FMO in its sole and absolute discretion. When providing links to other sites, FMO bears no responsibility for the accuracy, legality or content of the external site or for that of subsequent links. The information on proposed investment for high-risk investments is made available in the language relevant to the country or region where the bulk of operations take place. Translations of any information into languages other than English are intended as a convenience for local stakeholders. In case of any discrepancy, the information provided in English will prevail.

Who is our customer

Zephyr Power (PVT) Limited is a company incorporated in Pakistan which is developing a 50 MW wind park near Karachi. Zephyr Power is owned by a consortium of local Pakistani business people and CDC Group PLC, the development finance institution of the United Kingdom.

What is our funding objective?

FMO provides a combination of senior and subordinated long-term loans to Zephyr Power. FMO funds the development and construction of a 50 MW wind park located near Gharo, in the vicinity of Karachi, Pakistan. FMO financing allows Zephyr Power to be fully funded through its construction and initial operations phase.

Why do we fund this investment?

FMO funds this project as it provides an additional source of clean, renewable energy to Pakistan. Pakistan currently has a demand for electricity which exceeds its reliable generation capacity by over 25%, resulting in frequent power outages. Much of Pakistan’s current power is supplied by imported heavy fuel oils. By funding Zephyr Power, FMO contributes to increasing Pakistan’s power supply, reducing blackouts and replacing expensive fossil fuel generation with cheaper, renewable wind energy.

What is the Environmental and Social categorization rationale?

While all Performance Standards are applicable to this investment, FMO’s environmental and social ("E&S") due diligence indicates that the investment has impacts which must be managed in a manner consistent with the following Performance Standards: PS1: Assessment and Management of Environmental and Social Risks and Impacts; PS2: Labor and Working Conditions; PS3: Resource Efficiency and Pollution Prevention; PS4: Community Health, Safety and Security; PS6: Biodiversity Conservation and Sustainable Management of Living Natural Resources. The E&S Category is B+. This reflects that the potential adverse E&S impacts will be largely reversible and can be mitigated through readily available mitigation measures that will be included in the environmental and social management system (“ESMS”) to be used during construction and operation. The ESMS will also be designed to continuously monitor risks such as the health and safety of construction labour and members of local communities where relevant. The project and its ESMS will be designed to avoid, minimise and where needed, offset, potential impacts beyond site boundaries, such as local community expectations for jobs and any potential impacts on migratory birds. IFC PS 5, PS 7 and PS 8 are not considered to be triggered as the project is located on unoccupied and unused land leased from a government body and will not result in physical displacement, economic loss or livelihood impacts. While there are groups in Sindh that may be considered Indigenous under some (but not all) of the definitions under IFC PS7, the ESIA and ESDD found that the project did not have real or perceived impacts on any such group; the project will not utilise any IPs customary land nor cultural property. No archaeological or cultural heritage artefacts were found to be impacted by any project component; while there is a graveyard adjacent to the site, it is not affected by the project in any way; furthermore, consultation with local authorities and local communities confirmed that it did not have any cultural significance; the project will not affect any archaeology or cultural heritage of national, local or community significance, therefore PS8 is not triggered.

Effective date
Total FMO financing
USD 20.65 MLN
Risk categorization on environmental and social impacts, A = high risk, B+ = medium high risk, B = medium risk, C = low risk Environmental & Social Category
(A, B+, B or C)