British International Investment

Metro Wind Power Limited

South AsiaInfrastructure

In partnership with Gul Ahmed Metro Group we have formed the Metro-BII Renewables joint venture to develop and operate up to 500MW of renewable energy assets in Pakistan. Through the joint venture, British International Investment will acquire a significant minority stake in Metro Wind Power Limited, an under-construction 60MW windfarm project, developed by Gul Ahmed Metro Group.

This investment was made when British International Investment was named CDC Group.

Our investment

Description of the investment.

Our investment will support the development of a clean energy platform and help to scale renewable power capacity in Pakistan. The partnership will help accelerate investment into the renewable power sector in Pakistan and underlines our focus on the renewable sector in the country.

Impact information

Applies to investments made from 2019 onwards. The tabs in this section define what we expect to achieve through the investment, assessing the potential impact of the investment against six dimensions of impact. You can find more details on our methodology of assessing impact here.

What?

Impact
  • Avoid/reduce greenhouse gas emissions (SDG 13A)
  • Economic opportunities created through firm growth (SDG 8.5)
  • Improve living standards for end consumers through the provision of affordable and reliable energy services (SDG 7.1, 7.2)

How?

Primary Secondary
  • Direct: Additional 400MW of greenfield renewable generation capacity to avoid/reduce greenhouse emissions through the displacement of thermal generation.
  • Economic enabler: Add 400MW of renewable generation capacity to increase the supply of reliable electricity to firms, thereby increasing productivity and leading to GDP growth and job creation; and to households, improving quality of life for end-consumers.

55 per cent of Pakistan’s electricity generation relies on imported fuels. This exposes the sector to fuel price volatility and has led to a build-up of receivables across the power value chain ($14bn which is equivalent to c. 4 per cent of GDP). The platform will contribute to relieving pressure on foreign exchange reserves and circular debt in the power sector. While this contribution is marginal in the context of the overall market, further increases in lower-cost generation should enhance the impact of primary outcomes by improving the creditworthiness of electricity distribution companies, attracting additional investment and enabling further investment into the network.

Who?

Stakeholder Geography Characteristics
Planet

Global

n/a

Employees

Pakistan

Jobs will be supported in manufacturing, trade and hospitality, and construction, transport and services; whilst indirect employment will be driven by agriculture.

Consumers

Urban and peri-urban households. Households on average pay $0.07-0.08/kWh depending on their consumption, with energy and lighting representing 6.7-7.8 per cent of total household expenditure.

How much?

Scale Depth/Duration

The firm will avoid/reduce greenhouse gas emissions by 728,000 tonnes per year, equivalent to the annual per capita emissions of c. 383,000 Pakistanis. It will also support 16,700 jobs and livelihoods, and provide electricity to meet the demand of 869,000 consumers.

We expect the impact to be deep given high unemployment rates in the country. We also expect the impact to be deep for higher income consumers who utilise more electricity. Once the projects are commissioned, the impact is expected to last 25 years and will diminish over time as new capacity is added to the grid.

Contribution/additionality

Contribution/additionality
  • Financial additionality: Provide long term US dollar capital which is not available from most commercial sources.
  • Value additionality: Pursue a developmental strategy through the creation of a joint venture to build more renewable power in Pakistan.

Grid score

Grid Score

To help us direct our investments, we previously used a tool called the Development Impact Grid. It scored investments out of four, based on two factors: the difficulty of investing in a country and the propensity of the sector to generate employment. This tool was used for investments until the end of 2021. Since 2022 it has been replaced by the Impact Score.

3.99

Risk

External Risk
  • Risk of sectoral issues leading to pipeline project delays and preventing the platform-level impact case from materialising in the expected timeframe. This is directly correlated with commercial risk and subject to the same mitigants. Simultaneous progress is also required to reduce technical and commercial losses, which is outside GAM's control and will need to be tolerated as part of the transaction.
Alignment Risk
  • As a purely commercial entity, GAM could make a success of existing investments with good returns and no further capital deployment for new projects. We perceive this risk as low, as it is mitigated through the Joint Venture Agreement and investment policy which focus on active greenfield development and specific language for acquisitions.

Reporting and Complaints Mechanism

The Reporting and Complaints Mechanism allows anyone outside BII to report alleged breaches of the business integrity or environmental and social provisions of BII’s Policy on Responsible Investing. This includes breaches made by BII, a BII investee, or a portfolio company of a fund in which BII has invested. The Reporting and Complaints Mechanism Rules are available here. Reports and complaints can be submitted by email to [email protected] or by mail. See more details on our Reporting and Complaints Mechanism here.

For any other general enquiries contact us at [email protected]

  • Key facts

    Last updated

    When the last quarterly update of the website database occurred.

    :
    March 2024
    Project number

    An identifier number shared by investments in the same project.

    :
    D2828
    Status

    The current status of the investment (green flag for active and red flag for exited).

    :
    Active
    Region

    The geographical region where the country is located. We currently invest in Africa, South Asia, South East Asia and the Caribbean. In 2023, BII’s investment mandate was extended allowing it to invest in regional funds linked to Ukraine, with the majority of activity expected to begin post-war. Investments outside these regions were made prior to 2012 under previous investment mandates.

    :
    South Asia
    Sector

    We prioritise those sectors that facilitate development and need our capital the most. Our priority sectors contribute towards many of the Sustainable Development Goals. They range from investing in the power infrastructure that will provide people with better access to electricity, to investing in financial institutions that direct capital to the individuals and businesses that need it the most.

    :
    Infrastructure

    We provide capital in the following ways: directly – through direct equity, direct debt, guarantees and other non-intermediated financial instruments; and indirectly – principally through investment funds.

    For direct investments and fund investments, this is the date BII committed capital to the investments. This is typically the date on which legal agreements are signed by all parties.

    For the portfolio companies of our fund investments, this is the date (either the month or the quarter) on which the fund committed capital to the portfolio company.

    For direct equity investments, this is the date at which British International Investment exited the investment.

    For debt investments, this is the date at which the final debt repayment was made.

    For funds, this is the date at which the fund was terminated.

    For underlying fund investments, this is the date at which the fund manager exited the investment.

    The total amount committed, per financial instrument, per investment, on the date BII becomes subject to a binding legal obligation to provide funding or assume a contingent liability. This information is provided in US dollars.

    For direct investments, this is the amount that BII has committed to the business or project. For fund investments, this is the amount BII has committed to the fund.

    The currency in which the investment was made.

    Investment type :
    Guarantee
    Start date :
    November 2021
    Amount :
    $9.79m
    Currency of investment :
    USD
    Domicile

    The company or investment fund’s place of incorporation.

    :
    Pakistan
    Climate finance type:
    Mitigation

Related investments made by BII into this company:

Investment name Commitment Region Sector Start date Status
Investment 01 $425.34k, $7.61m South Asia Infrastructure November 2021 Active

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