Financing for Renewable Energy Scheme of State Bank of Pakistan

-


On 22 July 2020, State Bank of Pakistan ("SBP") communicated through its IH&SMEFD circular letter No. 23 of 2020 some amendments in its earlier instructions regarding its Green Banking Initiative under which it provides refinancing facilities to Banks and Financial Institutions for Renewable Energy ("RE") projects at subsidize rates. In 2019, SBP implemented a financing scheme for RE projects after the expiry of an earlier scheme that was initiated in 2016. The scheme has classified RE projects in three categories:

Category I: Projects of 1 to 50 MW for prospective sponsors;   
Category II: Projects of  up to 1 MW for prospective sponsors;
Category III: Projects of 1 MW for suppliers / vendors of RE equipment;

On Wednesday, SBP announced amendments for category III of the scheme after receiving the positive response. In the original scheme, Banks and Financial Institutions could provide financing only to vendors / suppliers certified by Alternative Energy Board of Pakistan (AEBP). The SBP interest rate is 3% and Banks / FDI could lend upto 6% to vendors with a permitted spread of up to 3%. After these amendments the scheme is also available to the sellers of electricity who would purchase RE equipment from those vendors. The whole process can be depicted with the help of following diagram:


In is pertinent to note that refinancing will not made directly to the Electricity Selling Companies. Instead, it will be provided to vendors / suppliers certified by AEDB. SBP has also enhanced the maximum capacity of single renewable energy unit from 1 MW to 5 MW. Cumulative financing limit of a vendor / supplier has also increased from Rs. 1 billion to Rs. 2 billion. 





Comments

Post a Comment

Popular posts from this blog

What happened on 21 Dec 2025?

-
This briefing synthesizes critical developments across Pakistan's economic, regulatory, and corporate landscapes as of December 22, 2025. The day is marked by a bullish equity market, significant regulatory clarifications from the Federal Board of Revenue (FBR) for the upcoming tax year, and major strategic initiatives by leading corporations. Key takeaways include the Pakistan Stock Exchange reaching all-time highs, driven by an unexpected policy rate cut by the State Bank of Pakistan (SBP) and improving foreign exchange reserves. Concurrently, the FBR has detailed stringent enforcement and recovery mechanisms for Tax Year 2026, outlining the personal liability of liquidators, the process for third-party fund recovery, and severe penalties for defaulters, including property seizure and arrest. Sectoral performance shows a stark contrast, with the automotive industry demonstrating a robust recovery evidenced by a 92% year-on-year increase in tax collection for November 2025, while ...
Read more

Removal of JamaPunji Message

-
Image
Securities and Exchange Commission of Pakistan (“SECP”) through SRO 346(I)/2020 dated 29 April 2020 has withdrawn it earlier directive issued under SRO 924 (I)/2015 on 9 September 2015. SECP, in SRO 924 (I)/2015 , instructed all the companies listed on Pakistan Stock exchange to include a message on “JamaPunji" in annual accounts and balance sheet. Now, listed companies don’t have to publish this message in annual report.  JamaPunji Ad JamaPunji is an initiative of SECP to provide fundamental knowledge and understanding of financial markets to general public and enhance financial literacy in the country.
Read more

SRO 78 (I)/2021 The Inland Revenue Reward Rules

-
Image
Federal Board of Revenue (FBR) issued SRO 78(I)/2021 on 22 January 2021 to introduce the Inland Revenue Reward Rules, 2021. The purpose was to consolidate rewards rules already issued from time to time and make a robust system of incentives to motivate officers of Inland Revenue for enhancing their performance.   The rules also provide incentives to whistle blower and informants not belonging to the office Inland Revenue. Snapshot Reference No. SRO 78 (I)/202 1 Description The Inland Revenue Reward Rules, 2021 Date of Issuance 22 January 20 21 Amendment Consolidation of the Reward Rules, 1980 dated 29 March 1988, The Sales Tax Reward Order dated 30 November 1998, The Unified Reward Rules, 2006 dated 05 December 2006 and SRO 398(I)/2016 dated 05 May, 2016 Objective To consolidate exiting reward rules and introduce a robust reward system for officials and staff ...
Read more