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State Bank allows easy financing of small renewable power projects upto 10 MW - Naveed Yaseen - 12-02-2009 09:19 AM
KARACHI: Companies interested in setting up renewable power projects of up to 10 megawatts can now get discounted bank financing, the State Bank of Pakistan (SBP) said on Tuesday.
The initiative taken to meet growing needs of electricity demand of the country will allow sponsors of power projects to avail of financing facility through banks and development financial institutions for new imported and locally manufactured plant, machinery and equipment.
However, it said preference should be given to projects being established in less developed areas of the country.
The prospective sponsors should have met prescribed requirements of the Alternative Energy Development Board (AEDB), the concerned regulatory authority and other relevant government departments, in compliance with prevalent Renewable Energy Policy.
Financing shall be available only for establishing new power plants of up to 10MW installed capacity using renewable energy sources like wind, hydel, biogas, bio-fuels, bagasse cogeneration, solar power and geothermal as fuel.
“Financing will be available for LCs (letters of credit) established for import or purchase of new plant, machinery and equipment from December 1, 2009 to June 30, 2012 only.”
Refinance may be provided up to 100 per cent of financing provided by banks to eligible borrowers subject to adherence to other rules and regulations, it said.
Under the scheme, financing will be available for a maximum period of ten years including a maximum grace period of two years. The grace period will be over and above the availability period of one year.
However, maximum period of financing shall not exceed the period of ten years (including grace and availability period), from the date of first disbursement, it added.
The rate of service charge at which the SBP will provide refinance to the banks shall be determined on basis of average of weighted average yields of last two auctions of five and 10 years PIBs.
Service charges shall be announced for each fiscal year and shall remain valid for a period of one year from July 1 to June 30.
For the current fiscal year rates for end users have been fixed at 12.4 per cent for financing of up to five years and 12.5 per cent for any period between five and 10 years.
http://www.thenews.com.pk/daily_detail.asp?id=211035
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Renewable energy power projects: SBP introduces financing facility
RECORDER REPORT
KARACHI (December 02 2009): The State Bank of Pakistan on Tuesday introduced financing facility for establishment of new power projects using renewable energy with capacity of up to 10 mw with the view to meeting the growing electricity demand in the country. According to a Circular (SMEFD Circular No 19) issued on Tuesday, sponsors of power projects can avail financing facility through banks/DFIs for new imported and locally manufactured plant, machinery and equipment.
Preference shall be given to projects being established in the less developed areas of the country, it said. As per eligibility criteria laid down in the Circular, financing will be available to the prospective sponsors desirous of setting up of Power Projects with a capacity of up to 10 MW, who have completed prescribed requirements of Alternative Energy Development Board (AEDB), the concerned regulatory authority and other relevant Government Department / Authority, in compliance with the prevalent Renewable Energy Policy of the Government of Pakistan.
It said the financing shall be available only for establishing new Power Plants of up to 10 MW installed capacity using alternative / renewable energy sources (wind, hydel, biogas, bio-fuels, bagasse cogeneration, solar power and geothermal as fuel). However, financing will be available for LCs established for import/purchase of new plant, machinery & equipment from December 1, 2009 to June 30, 2012 only.
Refinance may be provided up to 100 percent of financing provided by banks/DFIs to the eligible borrowers for the import/ local purchase of plant, machinery & equipment subject to adherence of other rules & regulations, the circular said. Under the Scheme, financing will be available for a maximum period of ten years including a maximum grace period of 2 years.
The grace period will be over and above the Availability Period of one year. However, maximum period of financing shall not exceed the period of ten years (including grace and availability period), from the date of first disbursement, it added. According to the Circular, the rate of service charge at which SBP will provide refinance to the Banks/DFIs shall be determined on the basis of average of weighted average yields of last two auctions of 5 and 10 years PIBs.
It said the service charges shall be announced for each fiscal year and shall remain valid for a period of one year from 1st July to 30th June. However, for the current fiscal year the service charges and rates for end users have been fixed as per the following:
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Tenor Rate of Banks'/DFIs' End Users'
Refinance Spread Rate
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Up-to 5 years 9.90 percent 2.50 percent 12.40 percent
Over 5 years
and up-to 10 years 9.50 percent 3.00 percent 12.50 percent
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