State Bank of Pakistan (SBP) has extended the financing scheme for renewable energy through conventional and Islamic financing facility for the period of two years i.e. up to June 30, 2024.
The banking regulator introduced this scheme in 2016 for the first time which had already been extended twice since then.
The scheme provides concessionary financing for large renewable energy power projects as well as small-scale renewable energy solutions. The scheme also facilitates installation of renewable energy based solutions/projects under net metering system introduced by National Electric Power Regulatory Authority (NEPRA).
The scheme is available for power generation using alternative/renewable energy sources (i.e. solar, wind, hydro, biogas, biofuels, bagasse cogeneration, and geothermal as fuel).
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 MW to 50 MW for their own use, selling of electricity to the national grid (including distribution companies) or combination of both.
The prospective sponsors shall be required to have completed applicable requirements of Alternative Energy Development Board (AEDB), National Electric Power Regulatory Authority (NEPRA) and other relevant government departments/authorities (Federal or Provincial), in compliance with the prevalent Renewable Energy Policy of the Government of Pakistan.
The refinance under this scheme shall be up-to 100% of total financing (debt) of an eligible RE project of upto 20 MW and up-to 50% of financing (debt) of an eligible RE Project of more than 20 MW, subject to adherence of other rules & regulations. However, maximum refinance allowed under the scheme cannot be more than Rs. 6 billion for a single renewable energy project.
The financing scheme is based on three categories depending on the two major factors including the value of financing which is maximum 12 years with 2 years additional grace period, and the value of financing which is maximum up to Rs. 1 billion.
