In a significant step towards reducing global emissions, the International Finance Corporation (IFC) is channeling up to $35 million in equity and debt financing to SAFCO Venture Holdings Limited (SAFCO Ventures). This funding aims to establish Pakistan’s first greenfield facility dedicated to producing sustainable aviation fuel (SAF) from used cooking oil and other waste oils.
The investment, largely consisting of long-term equity capital, is expected to catalyze the development of a nascent SAF sector in Pakistan. The project promises to drive circular economy practices, generate employment, and support export-oriented economic growth.
Sustainable aviation fuel, derived from renewable biomass and waste, has the potential to reduce life-cycle greenhouse gas (GHG) emissions by up to 94% compared to conventional jet fuel. With the aviation sector responsible for 13.9% of global transport-related GHG emissions, SAF production presents a viable pathway to curb emissions and meet global climate targets.
The state-of-the-art SAF facility, set to be built in Sheikhupura, Punjab, will process 250,000 tons of feedstock oil annually, yielding 200,000 tons of SAF. This operation is expected to cut over 500,000 tons of carbon dioxide emissions each year. Additionally, the project will create 300 direct jobs through advanced technical training and technology transfer, while indirectly supporting around 20,000 jobs in the waste-to-fuel supply chain. The initiative also positions Pakistan to earn valuable foreign exchange revenue through SAF exports.
The IFC financing package includes $30 million in equity and $5 million in debt. Of the equity portion, $20 million comes directly from IFC’s funds, with up to $10 million sourced from the Climate Investment Funds Program for Accelerating Climate Transition (CIFPAK), developed in collaboration with the UK’s Foreign, Commonwealth & Development Office.
Managed by Safco OPCO, a subsidiary of SAFCO Ventures, the facility represents South Asia’s first large-scale SAF production unit. SAFCO Ventures’ affiliate, Biotech Energy (BTE), already operates Pakistan’s largest biodiesel refinery and an extensive feedstock oil collection network. The new facility will also produce Bionaphtha, a key ingredient for sustainable plastics.
“We are delighted to partner with IFC to launch this pioneering SAF facility in Pakistan,” said Ali Shaikh, Founder and CEO of SAFCO Ventures. “This project aligns with our vision of creating a sustainable and efficient feedstock oil supply chain, while scaling up SAF production to meet global demand.”
Ashruf Megahed, IFC’s Regional Industry Head for Manufacturing, Agribusiness, and Services, emphasized the broader implications of the initiative: “This project exemplifies how fuel production can integrate into a circular economy by utilizing waste materials. It sets a precedent for similar investments in sustainable fuel production globally, proving that such projects can avoid negative impacts on food resources and water supplies.”
Pakistan generates over a million tons of recoverable waste oils annually, offering ample feedstock for SAF production. By harnessing this resource, the project seeks to transform waste into a valuable asset, strengthening the country’s circular economy.
Since 1956, IFC has invested nearly $13 billion in Pakistan, supporting key sectors such as renewable energy, healthcare, infrastructure, agribusiness, and manufacturing. This latest investment underscores IFC’s commitment to driving sustainable development and fostering innovation in emerging markets.
