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January 15, 2024

GuarantCo and Bank Alfalah provide Shams Power with a PKR 1.5 billion (c. USD 5.2 million) finance solution to invest in small solar plants in Pakistan

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GuarantCo and Bank Alfalah provide Shams Power with a PKR 1.5 billion (c. USD 5.2 million) finance solution to invest in small solar plants in Pakistan

GuarantCo, part of the Private Infrastructure Development Group (PIDG), and Bank Alfalah have provided Shams Power with a PKR 1.5 billion (c. USD 5.2 million[1] ) finance solution to support the construction of 10 MW of small rooftop and ground mounted solar plants at commercial and industrial sites across Pakistan to reach grid connected businesses.

Shams Power is an established distributed solar developer with a total of 27 projects and an installed capacity of 25 MW across Pakistan. Eighteen projects with a capacity of 21.2 MW were completed and became operational under the first phase of the PKR 2 billion (c. USD 11.3 million [2]) facility provided by GuarantCo and Bank Alfalah in December 2021.

The finance solution of PKR 1.5 billion (USD c.5.2 million) of senior debt provided by Bank Alfalah is 75 percent guaranteed by GuarantCo. The proceeds will support the construction of an additional c. 10 MW of solar projects across Pakistan. The second phase seeks to largely replicate the success of the first transaction working closely with the same transaction partners including Bank Alfalah and Capital Resource.

Shams Power helps reduce carbon emissions and has a positive impact on mitigating climate change, through the provision of clean, sustainable solar power. Both transactions will make a further contribution to the transformation of the rooftop solar market in Pakistan by demonstrating the ability for rooftop solar providers to access debt funding and scale up. This will allow the unlocking of more solar potential and help build the capacity of energy and financial regulators in this area. It will also create a supportive and practical regulatory and financial framework whilst building the capacity of banks that are new to this asset class.

The financing solution will support solar projects across Pakistan, which will reduce reliance on the grid, save an estimated 10.2k of CO2 emissions per year, and contribute towards progressing the Sustainable Development Goals (SDGs) in the country. The transaction will make a direct contribution to SDG 7: Substantially increase the share of renewable energy in the global energy mix and SDG 13: Climate mitigation.

Business users will benefit from a saving of 30-50 percent on their electricity costs through the solar systems. The proposed solution increases businesses’ electricity reliability in case of black-outs and reduces their reliance on back-up diesel generators.

In addition, GuarantCo, through a PIDG Technical Assistance grant, is co-financing Shams’ Solar EmpowHer programme which provides the necessary knowledge and skills for female engineers in the solar industry to empower them and promote gender diversity in the solar sector. Read more.

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