NJHPC signs agreement with NBP, other financial institutions
S REPORTER KARACHI—Neelum Jhelum Hydropower Company (Pvt.) Limited (NJHPC) has entered into a financing agreement amounting to Rs100 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 is structured by NBP Aitemaad. The signing ceremony was held at a local hotel here on Wednesday, said a statement. The ceremony was attended by President & CEO, NBP, Syed Iqbal Ashraf, Chairman, WAPDA, Zafar Mahmood, Member finance, WAPDA, Anwaar ul Haq and CEO NJHPCL Lt. Gen (R) Muhammad Zubair along with Presidents and senior officials of all the 16 participating financial institutions.
NJHPC mandated National Bank of Pakistan to act as Mandated Lead Arranger (MLA) for arrangement of up to Rs100 Billion through issuance of rated, secured and privately placed Sukuks to partially finance the construction of strategically important 969 MW hydel power project located in District Muzaffarabad, Azad Jammu & Kashmir. President, NBP, Syed Ashraf on the occasion said the Sukuk is structured with a tenor of 10 years and is backed by the sovereign guarantee from Government of Pakistan.
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 GoP guaranteed Islamic instrument. Ashraf further added 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. It is the largest hydropower project undertaken in the country since the completion of Mangla and Tarbela Dam projects. On completion, it is designed to generate 5.15 billion units of electricity annually, green energy fetching total revenue of up to Rs. 50 billion to WAPDA annually as per existing comparable tariff: Scheduled completion of the Project is end of July 2017.
Addressing the ceremony, Chairman, WAPDA, 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 the history of country.
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