A new investment will help increase the availability of hydrogen peroxide and boost competitiveness of the polyvinyl chloride (PVC) and base chemicals sector, while tackling climate change in Pakistan.
The IFC’s $15 million investment in Engro Polymer & Chemicals Limited (EPCL) is also expected to create jobs, improve resource efficiency, and drive economic growth in the country, said a recently-issued statement.
The IFC’s support will allow EPCL—the only vertically integrated PVC and chlor-alkali producer in the country—to expand its product range to include hydrogen peroxide, supporting the growth of textile, buildings, and construction sectors in Pakistan. Further, IFC’s long-term investment will contribute approximately $57 million to the nation’s economy through efficient linkages to the local supply chain and an additional $28 million through induced effects.
The IFC’s funding will enable EPCL to reduce the usage of imported ethylene in the raw material mix for PVC production. While reducing PVC manufacturing costs, it will help the company enter the hydrogen peroxide market—with a capacity of 28,000 metric tons—as the lowest-cost producer in the country.
The climate change mitigation project is also expected to reduce GHG emissions of around 23,074 tons of CO2-equivalent annually and 3,540,000 m3 of natural gas use annually.
“Our investment in EPCL will help in cost-efficient production of critical raw materials that are used across sectors in the economy, including construction, agriculture packaging, and fast-moving consumer goods. This will contribute to the sectors’ growth momentum backed by a growing population, infrastructure development, and public infrastructure projects,” said Nadeem Siddiqui, IFC Senior Country Manager for Pakistan.
He added, “IFC’s investment will also support resource efficiency—through raw materials savings—at the firm level while reducing the usage of oil-based products at the sector level.”
“I’d like to express my gratitude to IFC which, with the recent financing of $15M, has displayed both confidence in, and support for, Engro Polymer’s growth. We value IFC as a key stakeholder and partner and look forward to continuing a mutually beneficial relationship with IFC’s involvement in the company’s future projects,” said Jahangir Piracha, CEO of EPCL.
The IFC’s advisory services will help EPCL reduce its carbon footprint and help the company develop a carbon neutrality strategy under the Global Climate Platform and Pakistan Resource Efficiency Advisory projects. EPCL is a subsidiary of Engro Corporation Limited, a strategic IFC client for nearly three decades. IFC’s current outstanding exposure to all entities of Engro Corporation stands at $53.5 million.
The IFC, a member of the World Bank Group, is the largest global development institution focused on the private sector in emerging markets.