The financing for the Scheme for 2022–2023 has been suspended because the funds have not yet been received, a bank informed its client.
The Renewable Energy Refinancing Scheme, which was established to address the problems of energy scarcity and climate change in the nation, has been suspended by the federal government.
Banks have not been transferring the funds under the Renewable Energy Refinancing Scheme, according to sources who spoke to the media.
The financing for the Scheme for 2022–2023 has been suspended because the funds have not yet been received, a bank informed its client.
This Renewable Energy Refinancing Scheme included three categories.
The maximum tenor of financing is 12 years, including a maximum grace period of 2 years, and is available to prospective sponsors who wish to establish 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 a combination of the two.
Under Category 1, a single borrower may also receive up to Rs 6 billion in financing.
For those potential sponsors who want to install renewable energy source-based projects or solutions to generate up to 1 MW of electricity for their own use or to sell to the distribution company in accordance with NEPRA’s net metering regulations, financing is available under Category II. The maximum financing term is 10 years, plus a maximum grace period of three months.
In contrast, the policy allows for financing of up to Rs 400 million for a single borrower.
Under Category III, financing is offered to Renewable Energy Investment Entities (RE-IEs), which were created to invest in the production of renewable energy through the installation of renewable energy projects/solutions of up to 5MWs, for the purpose of selling electricity or leasing, renting, or selling renewable energy equipment to ultimate owners or users on a deferred payment basis.
A RE-cumulative IE’s financing limit is Rs 2 billion, and the maximum financing term, including any grace periods, is 10 years.
It is important to remember that SBP increased the cumulative financing limit for this Renewable Energy Refinancing Scheme from Rs. 1 billion to Rs. 2 billion.
To help the nation combat energy shortages and climate change, the SBP Financing Scheme for Renewable Energy was introduced in June 2016.
The programme was initially split into two categories, the first of which permitted financing for renewable energy power projects with capacities ranging from 1 to 50 MW for use on-site, sale to the national grid, or a combination of the two.
The installation of renewable energy-based projects of up to 1MW to generate electricity for one’s own use or selling to the grid or distribution company under net metering were eligible for financing under the second category, which was open to domestic, agricultural, commercial, and industrial borrowers.
Later, in July 2019, the SBP introduced category III to make financing for the installation of wind and solar systems up to 1MW easier for suppliers and vendors. In August 2019, the SBP also unveiled a Shariah-compliant variation of the programme.