- Date written
- January, 2024
- Contact for guarantco
- Marjolein van Kampen
- Communications Director
- +44 (0)738 8857097
- marjolein.van-kampen@guarantco.com
- Contact for PIDG
- Cecille Sorhus
- Head of Communications
- +44 (0)7917 302724
- cecille.sorhus@pidg.org
- Share
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.
Layth Al-Falaki, CEO of GuarantCo, said:
“We are very pleased to have closed our second transaction with Shams Power in partnership with Bank Alfalah. Our first transaction two years ago, has proven that the financing model is scalable, replicable and the need for guarantee support will hopefully reduce over time as private sector involvement increases and local currency financing for this asset class becomes more prevalent. This transaction supports Pakistan’s commitments to decarbonise its power sector and is aligned with PIDG’s 2023-2030 strategy. Through our partnership with Shams, we continue to support Pakistan in its ambition to improve energy access and provide economical, clean and consistent energy supply to businesses as they transition towards renewable energy.”
Omar Malik, CEO of Shams Power, said:
“This additional PKR 1.5 billion milestone with Bank Alfalah and GuarantCo’s backing isn’t just about powering businesses, it’s about powering Pakistan’s clean energy goals and increasing competitiveness of the C&I sector of Pakistan. Building on our past success, we’re deploying another 10 MW, delivering reliable renewable energy and a brighter future to businesses nationwide. We’re not just talking cost savings and sustainability wins for our clients, but sparking job creation, strengthening energy security, and empowering women in the solar sector through our Solar EmpowHer program. We would also like to specially thank PFAN for championing this phase of our transaction, and to GuarantCo and Bank Alfalah for their continued support. Together, we’re not just scaling solar, we’re shaping a greener, more equitable Pakistan, one watt at a time.”
Atif Bajwa, CEO of Bank Alfalah, said:
“Bank Alfalah is pleased to complete our second transaction with Shams Power in partnership with GuarantCo. This agreement will significantly expand the share of cost-effective, environment-friendly and renewable source of energy in the country, paving a way for a greener way forward.”
Asif Elahi, Managing Partner of Capital Resource, said:
“It has been a real privilege working with Shams Power on this challenging assignment. I am pleased to have been part of this journey and advising the company, over the years, in successfully scaling up its operations and meeting its clean energy financing targets to become the market leader in the C&I solar space in Pakistan. I would also like to take this opportunity to acknowledge and thank the Private Finance Advisory Network (PFAN) for promoting and supporting Shams Power for this particular transaction and of course our long-standing development partners, GuarantCo for their continued commitment to private sector credit growth in Pakistan.”
[1] As per December 2023 exchange rate (PKR 288:1 USD)
[2] As per December 2021 exchange rate (PKR 177:1 USD)
