Project detail - JCM POWER EUROPE BV

JCM POWER EUROPE BV

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Who is our client

FMO is considering an investment opportunity in JPL Holding Pte. Ltd (“JPL”), a company incorporated in Singapore and 100% owner of Jhimpir Power (Private) Limited, a 50 MW wind-powered generating facility located in the Jhimpir Valley, Pakistan (the “Project”), operational since March 2018. The JPL Project has been developed by a Dubai-based company engaged in renewable power development focusing on both utility scale and distributed generation strategies.

Funding objective

The Jhimpir wind corridor has excellent wind resources, and several other projects in different stages of development/construction or operation are located in the area. As part of acquiring the Project, FMO also seeks to provide long-term capital to the Project’s developer and gain access to an attractive portfolio of operating and development assets in Pakistan. This will allow FMO to build out renewable energy capacity in a market which is characterized by a power deficit.

Why we fund this project

Renewable energy production is the key focus of FMO's energy strategy. Pakistan has an energy shortfall resulting in regular power cuts, which results in loss of productivity and hence limits the country’s economic growth. The Government of Pakistan is supportive to renewable energy project development and consequently has created the enabling environment for potential investors and lenders to invest in the sector. Wind and solar power plants (given its relative short construction time), can contribute quickly and in a more sustainable way to Pakistan's energy production compared to other energy sources (i.e. hydropower / thermal). The JPL Project is expected to generate an average of 198 GWh of electricity annually.

Environmental and social rationale

The E&S risk of the transaction has been classified as cat B+. The wind park is operational and is financed through a loan from a development finance institution applying the IFC Performance Standards in their due diligence and monitoring of the Project. The transaction triggers the IFC Performance Standards 1, 2, 3, 4 and 6. Performance Standard 5 is not triggered because there is no economic or physical resettlement. Performance Standard 7 is not triggered because the communities surrounding the Project are not indigenous peoples. Performance Standard 8 is not triggered beyond the standard practice of a chance find procedure. The environmental & social action plan agreed with the lending development finance institution is being implemented in a pro-active and satisfactory way. The project company has a fully functional bird/bat monitoring process in place, is very active in community development and engagement, and has designed the site lay-out in such a way that there is no resettlement and no negative impact on livelihoods.

More investments

Date Total FMO financing
1/19/2021 USD 0.59 MLN
Region
Asia
Country
Pakistan
Sector
Energy
Signing date
6/12/2020
Total FMO financing
USD 0.32 MLN
Fund
FMO
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)
B+