Project detail - HNDS ENERGY (PVT.) LTD.

HNDS ENERGY (PVT.) LTD.

Status: Approved investment
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Disclaimer

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

Scatec ASA (“Scatec”) is a publicly listed Norwegian developer, investor and constructor of renewable energy projects in emerging markets. Currently, Scatec has globally 1.6 GW operational, 320 MW in construction and almost 10 GW in development. For the 3 PV solar projects (‘Sukkur’) in Pakistan, FMO is a senior Lenders with a debt amount of up to EUR40m.

What is our funding objective?

The debt funding will be dedicated to the development and construction of 3 plants with each 50MWac in Pakistan. The FMO investment in Sukkur is in total up to EUR40m in 3 Senior (USD-based) loans, with the remaining Senior debt coming from local banks (and in local currency). The project has 3 separate SPVs and will be financed on a standalone basis: HNDS Energy (Pvt) Ltd, Helios Power (Pvt) Ltd., and Meridian Energy (Pvt) Ltd. Scatec and its local partners (Nizam Energy (Private) Ltd will provide the necessary equity contributions.

Why do we fund this investment?

The “Sukkur” investments by Scatec directly contribute to the realization of the policy of the Pakistani government targeting 30% renewable electricity generation by 2030 (up from the current ~4%). This Project also complies with FMO’s Strategy with respect to energy security and energy transition, which is of particular importance for Pakistan (being still heavily dependent upon thermal generation and imports of fossil fuels).

What is the Environmental and Social categorization rationale?

The Project is an A-risk category according to FMO’s Sustainability Policy (and in line with IFC’s Performance Standards). IFC PS1-4 are triggered and due to resettlement and cultural heritage, also IFC PS5: Land & Resettlement and IFC PS8: Cultural Heritage. IFC PS6: Critical Habitat is not triggered as the project is not located in a critical habitat area and IFC PS7: Indigenous People was not triggered as per due diligence findings of the nearby communities. Key E&S focus areas include achieving Broad Community Support and implementing resettlement prior to site mobilization. The project company will follow and support the process in line with FMO standards and IFC PS 5. While local communities and authorities are supportive of the project, proactive management of the project-community relationship and avoiding project-induced intra-community tensions are key areas where the company will continue to focus their efforts. A project-specific environmental and social management system with plans and procedures addressing all relevant areas, including the above, will be implemented by the project company and cascaded down to contractors and subcontractors.

Region
Asia
Country
Pakistan
Sector
Energy
Effective date
2/18/2021
Total FMO financing
USD 13.04 MLN
Funding
FMO NV
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)
A