SBP eases terms for renewable energy financing

SBP eases terms for renewable energy financing

SBP eases terms for renewable energy financing

Karachi: All RE-IE’s will be allowed to avail financing on easy conditions to remove the growing electricity shortage in the country as per the SBP. 

The SBP noted on Monday that to promote investment in RE solutions by companies, the central bank has eased the conditions for renewable energy solutions under the renewable energy of the refinance scheme. 

With the ambition to help address climate change and energy shortages, the central bank revised the scheme for financing for Renewable Energy as of July 2019.  Ever since the inception of the scheme, there have been 717 projects which overall have the potential to add 1,082MW of Energy supply through renewable sources which have been financed. From June 30, 2021, the outstanding financing under this scheme is Rs 53 billion. 

Renewable energy is often referred to as clean energy that comes from natural sources like sunlight, water, and wind as well as other processes that are organically replenished. “Now, all the RE-IE’s interested in adapting to renewable energy projects and solutions will now avail under refinance category-III of the scheme,” said the SBP. 

A RE-IE is any organization that engages in establishing a renewable energy project for onward renting out, leasing, as well as selling on a deferred payment basis, or simply selling the electricity generated through these projects to the end-users. 

The SBP has previously launched a Sharia-compliant version of the scheme in August 2019. This scheme will now comprise three categories. Under the First category, financing Is permissible for setting up the Re-power projects with a capacity that ranges from 1-50 MW for electricity selling or for their own use as well as a combination of both. 

Domestic, agricultural, industrial, and commercial borrowers will be able to obtain financing for renewable energy-based projects of up to 1MW that will be utilized to generate power for personal use or to sell to the distribution company for net metering.

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