Renewable developer Scatec and local partner Nizam Energy have secured a $100m financial closure for a solar project in Pakistan.

The closure comes after the Dutch development bank FMO, Faysal Bank, Bank of Punjab, and Pak Kuwait Investment signed credit agreements for the non-recourse debt financing agreement.

The credit facilities will cover up to 75% of the total cost of the 150MW Sukkur project. Scatec and Nizam Energy intend to start construction within the first half of this year.

Scatec CEO Raymond Carlsen said: “We are proud to complete the financing of our first project in Pakistan together with our partners.

“The government plans to increase the share of renewable energy to 30% by 2030 and we look forward to supporting this growth by delivering 305GWh of clean power annually.

“This is enough to cover the electricity needs of about 150,000 households and will contribute to avoiding more than 106,000t of GHG emissions per annum.”

FMO agreed to provide half of the debt quantum under a credit facility of $39m. Three local commercial lenders will provide the remaining half under credit facilities of an aggregated $42m (PKR6.7bn).

Located in the Sindh province, south-east of Pakistan, the Sukkur project portfolio was awarded a ‘costs plus tariff’ agreement by the National Energy Power Regulatory Authority early last year.

For this project, Scatec will provide engineering, procurement, and construction services, as well as operations, maintenance, and asset management services to the power plants.

The company will hold 75% of the equity while Nizam Energy will hold the remaining 25%.