sbp’s refinancing scheme for renewable energy (revised) saleem_pakistan_0.pdfsbp’s refinancing...

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  • SBPsRefinancingSchemeforRenewableEnergy(Revised)DrMuhammadSaleemAdditionalDirectorStateBankofPakistan

  • PakistansEnergySupplyandDemand

    Installedpowergenerationcapacity:22,928MW Heavyrelianceonnonrenewableresources. Lessthan2percentfromREsources

    Verylowcomparedtoregionalandinternationallevel Expensiveandnotenvironmentfriendly Shortageofaround6000MW

    According to the National Energy Conservation Center(ENERCON), annual energy savings of up to 25 percent arepossible in all sectors, which equates to approximately $3billion per year.

  • S.No.

    Source EstimatedPotential(GW)

    1. Wind 340

    2. Solar 2,900

    3. Hydro:

    Large 50

    Small 3.1

    4. Bagasse Generation 1.8

    5. Waste 0.5

    Total 3,300GWSource:IFC

    RenewableEnergyPotentialinPakistan

  • RateofelectrificationinPakistan

    0%

    10%

    20%

    30%

    40%

    50%

    60%

    70%

    80%

    90%

    100%

    200220032004200520062007200820092010201120122013

    Off-Grid69milOff-grid,Unserved

    75milOn-grid,Underserv

    ed

    53milOn-

    grid,Served

    144milfacingEnergyCrisis

    Source:PakistanOff-GridLightingConsumerPerceptionsStudy2015byLightingPakistan

  • RoleofCentralBankinPromotingClimateInvestment

    EnablingRegulatoryFramework GreenBankingGuidelines

    MarketDevelopment CreditGuaranteeFacility

    PublicFinancingMechanism Refinance/CreditLineforCleanEnergy

    Awareness&CapacityBuilding Workshops/Seminars/Conferences

  • FinancingSchemeforRenewableEnergy

    ObjectivesofSBPFacility

    Eligibility

    FeaturesoftheFacility

    GeneralProcedures

  • FinancingSchemeforRenewableEnergy

    FacilityhasbeenrevisitedinJune2016.

    Objectives: Meeting Growing Electricity Demand throughRenewable Energy in the country

    PromoteGreenBankingandClimateInvestment To provide concessionary financing for renewableenergy projects

  • FinancingSchemeforRenewableEnergyCategories

    The Revised Scheme comprises of two Categories (I & II)

    Category I: large renewable energy projects ranging from(1 MW to 50 MW). Maximum refinance allowed is Rs 6billionper project.

    Category II: small scale renewable energy solutions (04KW to 01 MW) to promote renewable energy uptakeamong domestic, commercial & industrial consumers inlinewith NEPRAs netmetering regulation.

  • FinancingSchemeforRenewableEnergyEligibility

    Eligibility: Projects falling under category I and category II Subject to Fulfilling of Requirements of:

    AEDB/ Provincial Energy DeptNEPRA & Government Regulatory authorities

    Projects achieving financial close before June 2019Refinance provided against 100% of bank lending toprojects subject to Rs 6 billion cap.

  • 10

    Mark-UpRates

    FinancingSchemeforRenewableEnergy Terms

    Max.tenor Max.graceperiodCategoryI 12years 2yearsCategoryII 10years NIL

    PeriodofFinancing

    RateofRefinance Banks/DFIsSpread

    EndUsersRate

    2.0% 4.00% 6.00%

  • Repayments

    CategoryI: Principalrepayableinquarterlyorhalfyearlyinstallments

    Mark-uprepaymentonquarterlybasis

    CategoryII: Principal&Mark-uprepayableinmonthlyorquarterlyinstallments

    Bank/DFIshallbeentitledtochargemarketmark-upfordelayedperiodinrepaymentofprincipal

    FinancingSchemeforRenewableEnergyFeatures

  • FinancingavailablethroughallCommercialBanksandDFIs AvailabilityofFunding:

    Under Category I: The banks/ DFIs are required to confirm availability offunds after their internal approvals.

    SBPconfirmationoffundswillbevalidforaperiodofsixmonths.

    FinancingasperlendingpoliciesofFIstocovercreditrisk

    BankstoevaluaterequestwithintheirlendingpoliciesandtermsandconditionsofSBPFacilityinmaximumthreemonths

    FinancingbasedonFirstComeFirstServedBasis

    FinancingSchemeforRenewableEnergy OtherFeatures

  • Secondhandmachineryshallnotbeeligible Banks/DFIsshallensurethatfirmcommitmentsoffundsnotfinancedunderSBPschemeareavailable

    Banks/DFIsshallmakedirectdisbursementstomanufacturers/suppliers/contractors

    RefinancetobeprovidedonthebasisInternalAuditCertificateoffinancingbank/DFI

    FinancingSchemeforRenewableEnergy OtherFeatures

  • ExpectedtoincreaseinvestmentinRenewableEnergysector

    Willreducepowershortfall

    PromotionofREatconsumerleveltosupportNEPRAsNetMeteringRegulations

    Environmentfriendlyenergyprojectsreducingimpactonclimatechange

    Moreincentiveforlendingbanks(higherspread)andendusers(lowrate)

    Likelytoreduceelectricitytariffwhichwillincreasebusinessactivities

    BenefitsofRevisedScheme

  • ImpactofSBPRefinanceSchemeTotalSize(MW) Technologies TotalCost(Million

    Rs)RequiredAmount

    ofRefinance(MillionRs)

    AmountSanctioned(MillionRs)

    618.1Solar,wind,biomass122,118.0 59,448.0 7,111.0

  • IdentifiedREInvestmentPotentialinMajorSectors

    16

    Sectortype Sub-SectorPotentialInvestment MainEquipmentforinvestment

    RE(MPKR) RE

    Industrial

    Textile 133,500Solarwaterheaters(SWH),windpower,photovoltaics (PV)

    Sugar 16,700 Biomass, PV

    Leather 12,000 PV,SWH

    Paper 1,400 Biomass, SWH

    Cement 33,000 Windpower,concentratedsolarpower

    Fertilizer 10,800 PV

    Othersectors 52,000 Varioustechnologies

    Non-industrialAgriculture 647,600

    Directcombustion ofbiomass, biogas,solarwaterpumping

    Residential 166,000Biomassfrommunicipalwasteandanimalmanure,SWH

    TotalInvestmentPotential 1,073,000 Source:IFCStudyonSEFinPakistan

  • OperationalMechanismoftheRevisedScheme(Category-II)

    1 BanksgetrequestfromclientsforfinancingundertheRevisedScheme Bankscarryoutduediligenceprocessandapproveorrejectloan

    2 BanksapproachSBPforsanctioningoflimitforapprovedloans SBPreviewseachcaseandapproveslimitsforbanks

    3 Banksdisbursefundsforsolarhomesolutionsetcasperterms BanksapproachrespectiveSBP-BSCofficeforrefinanceagainstdisbursedamount

    4 SBP-BSCofficestodebitbanksaccountasperrepaymentschedule

  • Thankyou

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