KARACHI: The State Bank of Pakistan (SBP) has extended renewable energy financing scheme up to June 30, 2022, a circular said on Friday, in what would be the central bank’s effort to address energy shortage and climate change challenges in the country.
The renewable energy financing scheme had expired on June 30, 2019.
This loan facility was available for power generation using alternative / renewable energy sources (ie solar, wind, hydro, biogas, bio-fuels, bagasse cogeneration, and geothermal as fuel).
Central bank would provide refinance to each bank and Development Finance Institution on service charges (mark-up) basis.
Financing under this scheme would be provided through all commercial banks and Development Finance Institutions (DFIs).
“Financing shall be available to the prospective sponsors who intend to set up renewable energy power projects with a capacity ranging from more than 1 megawatt to 50MW for their own use, selling of electricity to the national grid (including distribution companies) or combination of both,” the SBP said in the circular.
The loan amount would be Rs6 billion for a single renewable energy project with tenor of 12 years.
Banks would also provide lending to domestic, agricultural, commercial and industrial borrowers who were desirous of installing renewable energy based projects/ solutions of up-to 1MW for generation of electricity.
A borrower could install more than one renewable energy source-based projects/ solutions of up-to 1MW each with the condition that such projects should not be located contiguously.
The energy generated from these projects might be for own use or for supply to the distribution company, as per the rules set by the National Electric Power Regulatory Authority (NEPRA) under their Net Metering Regulations (as amended from time to time). The consolidated borrowing of a single borrower under this category would not exceed Rs400 million, the SBP circular said.
Under the scheme, banks could also extend loans to vendors / suppliers of renewable energy equipment certified under AEDB Certification Regulation 2018.
Banks would loan Rs1 billion to borrowers under this category, the central bank circular noted.