In 2009, the SBP launched a strategy for funding renewable energy power plants with the goal of promoting renewable energy projects in the country. To make it more appealing to borrowers and financing banks/DFIs, the scope and finance mechanism were updated multiple times.
The scheme’s goal is to help solve the combined challenges of energy scarcity and climate change by encouraging the use of renewable energy. The SBP renewable energy financing scheme and the Islamic renewable energy finance facility both terminated on June 30, 2022.
As a result, the SBP has decided to prolong the renewable financing scheme’s validity duration.
The SBP said in a circular that the renewable energy financing scheme and the Islamic finance facility for renewable energy have been extended for two years, until June 30, 2024.
It’s worth noting that Pakistan’s economy is grappling with both energy scarcity and climate change. The lack of energy has had a significant influence on the expansion of industries and enterprises, as well as the general welfare of the populace.
Climate change has also been manifested in the form of disastrous floods, droughts, heat waves, and shifting weather patterns. These modifications effectively stifle our potential to develop in a long-term manner.
To address these issues, the SBP opted to promote green banking, which involves the utilization of indigenous resources, particularly renewable energy, to ensure long-term banking and development. The program offers low-interest loans for large-scale renewable energy projects as well as small-scale renewable energy solutions.
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