Daily Times

KARACHI: Neelum-Jhelum Hydropower Company (NJHPC) has entered into a financing agreement amounting to Rs 100 billion with a consortium of 16 banks, led by National Bank of Pakistan (NBP), for raising Pakistan’s largest Shariah-compliant infrastructure corporate sukuks, based on diminishing musharaka, which was structured by NBP Aitemaad.

The signing ceremony was held at a local hotel on Wednesday, and was attended by NBP President and CEO Syed Iqbal Ashraf, WAPDA Chairman Zafar Mahmood, WAPDA (Finance) member Anwaarul Haq and NJHPCL CEO Lt Gen (r) Muhammad Zubair along with presidents and senior officials of all the 16 participating financial institutions.

NJHPC mandated the National Bank of Pakistan to act as Mandated Lead Arranger (MLA) for arrangement of up to Rs 100 billion through issuance of rated, secured and privately placed sukuks to partially finance the construction of strategically important 969MW hydel power project located in District Muzaffarabad, Azad Jammu and Kashmir.

NBP President Syed Ashraf on the occasion said the Sukuk is structured with a tenor of 10 years and is backed by the sovereign guarantee from the federal government. “This sukuk has received a preliminary rating of AAA from JCR-VIS and is expected to have a wider impact on financial market of Pakistan, helping augment a funding format that has been predominantly constrained to smaller deals with shorter tenors. This Sukuk will also provide avenues for Islamic banks and mutual funds to invest their liquid funds in a tradable government guaranteed Islamic instrument,” he added.

Ashraf said that the Neelum-Jhelum Project is a hydropower generation facility that envisages the diversion of Neelum River water through tunnels, which falls into Jhelum River after producing power, adding that it is the largest hydropower project undertaken in the country since the completion of Mangla and Tarbela Dam. On completion, he said, it would generate 5.15 billion units of electricity annually besides green energy, fetching total revenue of up to Rs 50 billion to WAPDA annually as per existing comparable tariff.

Addressing the ceremony, WAPDA Chairman Zafar Mehmood said this is the biggest ever quantum of funds that has been arranged from the local banks for any public sector project in history of the country. This historic achievement reflects not only investors’ confidence in the federal government and WAPDA but also indicates the potential of investment that hydropower sector offers in the country. He expressed gratitude to the prime minister, the water and power minister and the finance minister for their guidance and continuous support in arranging the record amount for NJHP.