International Finance Corporation (IFC) is providing up to $35 million in equity and debt financing to SAFCO Venture Holdings Limited (SAFCO Ventures) to establish Pakistan’s first greenfield sustainable aviation fuel (SAF) facility. This facility will convert thousands of tons of used cooking oil and other waste oils into aviation fuel, contributing to a reduction in global emissions.
According to the press release, the investment, primarily in the form of long-term equity capital, is crucial in supporting this emerging sector. It is expected to promote a circular economy in Pakistan, create jobs, and drive export-led growth.
SAF, a biofuel made from renewable biomass and waste resources, can cut life cycle greenhouse gas (GHG) emissions by up to 94% compared to traditional jet fuel. The transport sector is responsible for around a quarter of global GHG emissions, with aviation accounting for 13.9% of this, making it the second-largest contributor after road transport. Producing SAF will play a key role in reducing global emissions.
The new 200,000 tons-per-year (TPA) facility, located in Sheikhupura, Punjab, will process 250,000 tons of feedstock oil annually, converting it into SAF and reducing CO2 emissions by more than 500,000 tons per year. The project is also expected to create 300 direct jobs through technology transfer and training, and approximately 20,000 indirect jobs in the waste-to-fuel value chain, while generating foreign exchange through SAF exports.
IFC’s $35 million financing package includes $30 million in equity and $5 million in debt. Of the equity contribution, $20 million is from IFC’s own account, with up to $10 million from a climate-focused blended finance program (CIFPAK), recently launched in partnership with the UK Foreign, Commonwealth & Development Office.
The facility, South Asia’s first of its kind, will be operated by Safco OPCO, a subsidiary of SAFCO Ventures. Biotech Energy (BTE), another subsidiary, manages Pakistan’s first large-scale biodiesel refinery and one of its largest oil feedstock collection networks. The facility will produce SAF and Bionaphtha, a raw material for sustainable plastic production.
“We are excited to collaborate with IFC on this significant project in Pakistan,” said Ali Shaikh, Founder and CEO of SAFCO Ventures. “We are well-positioned to scale SAF production and enhance the country’s sustainable feedstock oil value chain.”
Ashruf Megahed, IFC’s Regional Industry Head for Manufacturing, Agribusiness, and Services in the Middle East, Central Asia, Türkiye, Pakistan, and Afghanistan, added, “This project highlights how fuel production can support a circular economy by utilizing waste materials, without impacting food production or water supplies. As IFC’s first investment in SAF, it sets a precedent for future investments in this sector and encourages other financiers to follow suit.”
Pakistan generates over a million tons of collectable used oils annually, including cooking oils and other waste, which can be converted into biofuel. By utilizing this abundant supply of used oils, the project will help foster the development of a circular economy.
Since 1956, IFC has invested around $13 billion in Pakistan, supporting various sectors such as renewable energy, financial inclusion, infrastructure, agribusiness, manufacturing, housing, healthcare, and trade.
