The State Bank of Pakistan (SBP) on Friday announced a revised refinancing scheme aimed at boosting renewable energy projects. The new scheme sets a maximum loan amount of Rs6 billion for individual projects up to 50 megawatts.
Originally launched through the IH&SMEFD Circular No. 03 on June 20, 2016, the SBP said the scheme aims to address the dual challenges of energy shortages and climate change by promoting renewable energy. The initial phase of the scheme expired on June 30, 2019, the SBP added.
Following feedback from stakeholders regarding demand and scope, the SBP has extended the scheme’s expiry period to June 30, 2022. The SBP said adjustments have been made to align with stakeholder recommendations, introducing three categories under the revised scheme:
Category I covers prospective sponsors interested in establishing renewable energy power projects with capacities ranging from more than 1 MW to 50 MW. These projects can be for personal use, selling electricity to the national grid (including distribution companies), or a combination of both.
Category II includes sponsors looking to install renewable energy source-based projects or solutions for generating electricity up to 1 MW.
Category III focuses on vendors and suppliers certified under the AEDB Certification Regulation 2018 for installing wind and solar systems. These installations can be on a lease basis or involve selling electricity to end users.
To streamline the process, the SBP will allocate annual limits to banks and development finance institutions (DFIs) based on their applications, which must be submitted by May 15 each year. For the financial year 2019-20, banks and DFIs have 30 days from the issuance of the circular to submit their requests for sanction limits.
The SBP emphasizes the importance of renewable energy in tackling Pakistan’s energy deficit and environmental challenges. By providing accessible financing options, the central bank aims to accelerate the adoption of clean energy solutions across the country. This initiative is expected to attract significant investment in the renewable energy sector, ultimately contributing to a more sustainable energy future for Pakistan.