DFCC Bank at forefront of green energy project financing
Thursday, 13 March 2014 00:00
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DFCC Bank, which is in the forefront of developing the green energy sector in Sri Lanka, recently conducted a capacity building program on ‘Energy Efficiency and Solar Net Metering’ for the corporate sector.
The program, which is one of several on the theme of ‘Green Energy’, discussed aspects such as the monetary and environmental impact of energy consumption, energy efficiency applications, innovative concepts to achieve energy efficiency and financing options for green energy projects.
Mahendra Jayalath and Sadam Ameer, two leading professionals in the field of energy auditing, conservation and facilities management both in Sri Lanka and overseas shared their knowledge with over 100 participants. Adding value to the program, solar net metering system vendors presented case studies on net metering and other solar based technologies.
Head of Corporate Banking Manohari Gunew-ardena stated in her address: “As a development bank we are proud to lead developments in green energy and will continue to partner with investors initiating projects in this area.”
The business case for green energy is now stronger than ever. Entrepreneurs are beginning to appreciate the potential and the financial gains possible in this sector. DFCC Bank has been promoting the sector as far back as 1996 when it supported Sri Lanka’s first-ever privately-owned, grid connected mini-hydro power plant in Dickoya. Since then DFCC has been the forerunner in leading financing and developments in this sector.
The ground breaking cash flow based repayment system which was lobbied by DFCC was a game changer in the way green energy projects were being looked at by investors. The instalments payable on loans was computed according to the rainfall pattern, differentiating between the wet and the dry seasons of the year. This innovation paved the way for other financial institutions to support the sector without hesitation.
DFCC has financed 54 projects, which accounts for 40% of all mini-hydro power projects operating in Sri Lanka, equaling a total capacity of 146 MW. This represents around 54% of the total installed capacity and includes the 9.9 MW power plant at Kuruwita which is one of the largest mini-hydro power projects yet to be commissioned in Sri Lanka.
DFCC facilitated credit for this sector through the World Bank and Global Environment Facility funded Energy Services Delivery and Renewable Energy for Rural Economic Development (RERED) projects. A key achievement of the RERED project was the electrification of rural homes using solar power.
DFCC BANK is also the pioneer financier for private sector wind power projects in Sri Lanka. The Bank played a key role in facilitating the introduction of cost-based, technology specific tariffs enabling projects using wind technology to be commercially viable. This has spurred development of wind power plants in Sri Lanka with nine projects being commissioned and several more in the pipeline.
DFCC’s work in green energy has won the bank several accolades. In 2003 DFCC was recognized by the Association of Development Financing Institutions in Asia and the Pacific (ADFIAP) and in 2013 it won the Outstanding Sustainable Project Finance Award at the annual Global Sustainable Finance Conference held in Karlsruhe, Germany. DFCC will continue to offer competitive financial solutions to fund energy efficiency initiatives.
