• IFC’s investments, primarily in the form of long-term patient equity, have been instrumental in anchoring this project and financing an emerging sector.

Islamabad, Pakistan, December 5, 2024 – IFC is providing equity and debt financing of up to $35 million to SAFCO Venture Holdings Limited (SAFCO Ventures) to build Pakistan’s first greenfield sustainable aviation fuel (SAF) facility , in which thousands of tons will be converted from used cooking oil and other waste oils to aviation fuel, thereby helping to reduce global emissions.

IFC’s investments, primarily in the form of long-term patient equity, have been instrumental in anchoring this project and financing an emerging sector. The project aims to help promote a circular economy in Pakistan, create jobs and support export-led growth.

SAF, a biofuel produced from renewable biomass and waste resources, can reduce lifecycle greenhouse gas (GHG) emissions by up to 94 percent compared to conventional jet fuel. The transport sector is responsible for around a quarter of global greenhouse gas (GHG) emissions, with aviation accounting for 13.9 percent of these emissions, making it the second largest source of emissions in this sector after road transport. Therefore, the production of SAF is expected to help reduce global emissions.

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

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

The facility is the first of its kind in South Asia and will be managed by Safco OPCO, a subsidiary of SAFCO Ventures. Biotech Energy (BTE), another subsidiary of Safco Ventures, currently manages Pakistan’s first large-scale biodiesel refinery as well as one of its largest oil feedstock collection networks. The facility will produce SAF and bionaphtha, a raw material used to make sustainable plastic products.

“We are pleased to partner with IFC to build this important facility in Pakistan,” said Ali Shaikh, founder and CEO of SAFCO Ventures. “We believe we are strategically positioned to increase SAF production while promoting a more efficient and sustainable crude oil value chain in the country.”

“This initiative shows how fuel production can be part of a circular economy, using raw materials that would otherwise be wasted, and therefore how it can occur without negative impacts on food production or water supplies. As the first IFC investment in the sustainable production of aviation fuel, it also sets the tone for similar IFC investments in this area and for other financiers to follow suit,” said Ashruf Megahed, regional industry head for manufacturing, agribusiness and services Middle East, Central Asia, Turkey, Pakistan and Afghanistan.

Pakistan produces more than a million tons of collectable waste oils every year, including cooking oils and other waste that can be used to produce biofuel. By leveraging Pakistan’s abundant supply of used oils and recycling otherwise hazardous waste products, the initiative will help promote the development of a circular economy.

IFC has invested around $13 billion in Pakistan since 1956, supporting various sectors such as renewable energy, financial inclusion, infrastructure development, agribusiness, manufacturing, housing, healthcare and trade.