The federal government has halted financing under the Renewable Energy Refinancing Scheme which was introduced to address the challenges of energy shortages and climate change in the country.
Sources told ProPakistani that banks have not been transferring the funds under the Renewable Energy Refinancing Scheme.
The funds for the Scheme for 2022-2023 haven’t been received yet, therefore financing is halted, a bank communicated to its customer.
There were three categories under this Renewable Energy Refinancing Scheme.
Financing is available for prospective sponsors, desirous of setting up renewable energy power projects with a capacity ranging from more than 1 MW and up to 50 MW for their own use, selling electricity to the national grid (including distribution companies) or combination of both maximum tenor of financing is 12 years including maximum grace period of 2 years.
Under Category 1, Financing for a single borrower is upto Rs 6 billion is also available.
Under Category II, Financing is available for prospective sponsors, desirous of installing renewable energy source-based projects/ solutions for the generation of electricity up to 1 MW for their own use and/or selling of electricity to the distribution company under NEPRA’s Net Metering Regulations Maximum tenor of financing is 10 years including a maximum grace period of 3 months.
Whereas Financing for a single borrower is upto Rs 400 million, as per the policy.
Meanwhile, under Category III, Financing is available to Renewable Energy Investment Entities (RE-IEs) which are established to invest in renewable energy generation through the installation of renewable energy projects/solutions of upto 5MWs, for selling electricity or leasing/ renting out/ selling on deferred payment renewable energy equipment to ultimate owners/ users.
The Cumulative financing limit of a RE-IE is Rs 2 billion and the maximum tenor of financing to a RE-IE is 10 years including a grace period of upto 6 months.
It is pertinent to note that SBP had enhanced the cumulative financing limit from Rs. 1 billion to Rs. 2 billion under this Renewable Energy Refinancing Scheme.
The SBP Financing Scheme for Renewable Energy was announced in June 2016 with an aim to help address energy shortages and climate change in the country.
The scheme was initially divided into two categories, with the first category allowing financing for renewable energy power projects with capacity ranging from 1-50MW for own use or selling to the national grid or a combination of both.
The second category allowed financing to domestic, agriculture, commercial, and industrial borrowers for the installation of renewable energy-based projects of up to 1MW to generate electricity for own use or selling to the grid or distribution company under net metering.
Later, in July 2019, the SBP introduced category III to facilitate financing to vendors and suppliers for the installation of wind and solar systems of up to 1MW. The SBP also launched a Shariah-compliant version of the scheme in August 2019.
