Karachi, February 17, 2026 – The State Bank of Pakistan (SBP) on Tuesday announced that the federal government is providing a 10 percent first loss credit guarantee to financing banks under the Prime Minister’s Fan Replacement Program (PM FRP), aimed at promoting energy conservation and efficiency across the country.
According to a notification issued by the Ministry of Energy (Power Division), the program is designed to encourage consumers to replace conventional ceiling fans with energy-efficient fans (EEFs) through an affordable financing mechanism. Under the approved term sheet, the government-backed credit guarantee will help mitigate default risks for banks, thereby enhancing their willingness to participate in the scheme. The settlement mechanism for guarantee claims will be notified separately.
SBP has advised banks to complete all necessary preparations, including system integration with the National Energy Efficiency & Conservation Authority (NEECA) online portal, to ensure smooth implementation. The central bank will also facilitate onboarding of participating banks and devise a payment mechanism for processing claims against the government-backed guarantee.
NEECA will spearhead nationwide implementation through a centralized web portal hosted by the Punjab Information Technology Board (PITB), ensuring coordination among banks, DISCOs, fan manufacturers, and bill-collecting agents. The authority will also launch awareness campaigns and monitor the program’s impact on energy conservation.
Under the financing framework, eligible consumers can avail loans ranging from Rs 10,000 to Rs 300,000 for 6 to 18 months, with repayments collected through electricity bills. Pricing will be one-year KIBOR plus 2 percent, with equal monthly installments.
The initiative is expected to significantly reduce household energy consumption, lower electricity bills, and support Pakistan’s broader energy efficiency and sustainability goals.