Project detail - MERIDIAN ENERGY (PVT.) LTD.

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.