World Bank Offers Financing Package to Power Projects in Afg...| MENAFN.COM

Wednesday, 28 September 2022 07:42 GMT

World Bank Offers Financing Package to Power Projects in Afghanistan

(MENAFN- Daily Outlook Afghanistan) KABUL -The World Bank Group has approved a $98.8m financing package, comprising a mixof guarantees, a loan, and swaps, for two gas-to-power energy projects inAfghanistan.
Thefinancing is aimed at increasing domestically generated electricity through thegas-to-power energy projects, whilst leveraging private financing for theenergy sector in the country.
WorldBank Afghanistan country director Henry Kerali said: 'Afghanistan's energy needsare enormous, and the new package will support a great step forward for thecountry's development. Investing in the energy sector is key for the country toachieve its full growth potential.
'Diversifyingsources of electricity supply can help more Afghans benefit from reliable gridconnections, improve employment generation and economic growth of the country,and reduce poverty. The World Bank Group stands with the Government ofAfghanistan throughout the implementation of the projects to ensure theirtimely and effective completion.
The$98.8m financing package will support Sheberghan and Mazar-e-SharifGas-to-Power Projects
Thefinancing package supporting the Sheberghan project features a $12.8m guaranteefrom the International Development Association (IDA), a World Bank Group fund,while the rest is for the Mazar-e-Sharif project.
Thepackage for Mazar-e-Sharif project includes a $12m guarantee from IDA tobackstop the ongoing payment obligation of Da Afghanistan Breshna Sherkat(DABS), and a $23.8m senior loan
Theproject also includes $1.5m in client risk-management swap from theInternational Finance Corporation (IFC), which will mobilise $43.8m in parallelloans for the project as mandated lead arranger.
Inaddition, Multilateral Investment Guarantee Agency (MIGA) is providing $48.7mpolitical risk insurance for the two private shareholders and a senior lender.
Theguarantees are expected to provide protection against the risks of breach ofcontract, expropriation, transfer restriction and currency inconvertibility,and war and civil disturbance for a period of up to 15 years.
Furthermore,the investments by IFC and political risk guarantees from MIGA will be partlycovered by the IDA Private Sector Window's (PSW) Risk Mitigation Facility andthe MIGA Guarantee Facility, respectively. (Power Technology)


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