IFC Invests $35 Million in Pakistan’s First Sustainable Aviation Fuel Facility

The initiative aims to convert used cooking oil and other waste oils into aviation fuel, supporting global efforts to reduce greenhouse gas (GHG) emissions.

The International Finance Corporation (IFC) has announced an equity and debt financing package of up to $35 million for SAFCO Venture Holdings Limited (SAFCO Ventures) to establish Pakistan’s first greenfield sustainable aviation fuel (SAF) facility. The initiative aims to convert used cooking oil and other waste oils into aviation fuel, supporting global efforts to reduce greenhouse gas (GHG) emissions.

The state-of-the-art facility, to be located in Sheikhupura, Punjab, will have an annual production capacity of 200,000 tons of SAF. This venture is expected to collect 250,000 tons of feedstock oil annually, reducing over 500,000 tons of CO2 emissions each year.

The initiative will also contribute to the local economy by creating 300 direct jobs and an estimated 20,000 indirect jobs in the waste-to-fuel supply chain. Additionally, the project will generate valuable foreign exchange revenue through SAF exports, while promoting a circular economy by repurposing hazardous waste oils.

“This initiative demonstrates how fuel production can be part of a circular economy, drawing from raw materials that would otherwise go to waste, with no adverse impact on food production or water supplies,” said Ashruf Megahed, IFC Regional Industry Head for Manufacturing, Agribusiness, and Services.

Financing and Strategic Partnerships

IFC’s $35 million financing package includes $30 million in equity—$20 million from IFC’s own account and $10 million from the climate-related blended finance program (CIFPAK), developed in partnership with the UK Foreign Commonwealth & Development Office. The remaining $5 million will be in the form of debt financing.

“We are pleased to collaborate with IFC in setting up this important facility in Pakistan," said Ali Shaikh, Founder and CEO of SAFCO Ventures. “This partnership positions us to scale SAF production and foster a more efficient and sustainable feedstock oil value chain in the country.”

Transforming Aviation and Waste Management

SAF, a biofuel made from renewable biomass and waste resources, can reduce GHG emissions by up to 94% compared to conventional jet fuel. Aviation currently accounts for 13.9% of the transport sector’s global emissions, making the adoption of SAF critical for reducing the industry's environmental impact.

The facility, managed by Safco OPCO (a subsidiary of SAFCO Ventures), will also produce Bionaphtha, a sustainable material for plastic production, furthering its contribution to Pakistan’s green economy.

Addressing Pakistan’s Untapped Potential

Pakistan generates more than a million tons of collectable waste oils annually, presenting a significant opportunity for biofuel production. This project capitalizes on the country’s vast supply of used oils to develop sustainable energy solutions.

IFC’s Longstanding Support for Pakistan

The IFC has invested approximately $13 billion in Pakistan since 1956, supporting key sectors such as renewable energy, healthcare, agribusiness, and manufacturing. This investment marks IFC’s first venture into SAF production, setting a precedent for similar projects in the region and globally.

The SAF facility represents a pivotal step for Pakistan in adopting green technologies, strengthening export potential, and advancing its role in combating climate change on a global scale.