So­lar PV project fi­nanc­ing for in­dus­tries

Pakistan Observer - - ECONOMY WATCH - STAFF RE­PORTER

LA­HORE—In­dus­trial users of elec­tric­ity are open to PV so­lu­tions to re­duce their day to day to ex­penses and their im­pact on cli­mate, but project fi­nanc­ing is one of the big­ger chal­lenges that yet needs to be ad­dressed. Forms of so­lar project fi­nanc­ing such as third party Power Pur­chase Agree­ments (PPA) and So­lar Leases have gained mas­sive ap­proval in United States and other de­vel­oped na­tions. Un­der a PPA, an in­staller builds a so­lar sys­tem at the client’s prop­erty at zero-up­front cost.

The sys­tem off­sets the cus­tomer’s elec­tric util­ity bill, and the de­vel­oper sells the power gen­er­ated to the client at an agreed upon tar­iff rate that is typ­i­cally lower than rates of the lo­cal util­ity at no ad­di­tional re­spon­si­bil­ity; whereas so­lar leases al­low the user to lease the plant at pre­de­ter­mined rates with zero or low ini­tial costs. Both of these mod­els en­able the cus­tomer to sup­port so­lar power and avoid costs aris­ing from op­er­a­tions and main­te­nance that are gen­er­ally trans­ferred to the de­vel­oper.

It is needed that banks and other lo­cal and in­ter­na­tional lend­ing in­sti­tu­tions pro­vide ad­e­quate sup­port to these project developers to of­fer bet­ter fi­nanc­ing op­tions to the in­dus­trial user. “With rapidly de­vel­op­ing tech­nol­ogy, and fall­ing panel costs, it is es­sen­tial that the Govern­ment pro­vides fi­nan­cial pro­vi­sions to en­cour­age so­lar in­stal­la­tions for busi­nesses and house­holds alike. We are cur­rently in talks with a cou­ple of banks that have shown in­ter­est in fi­nanc­ing so­lar power projects. Pay­ments plans for bor­row­ers, con­nec­tion to grid in case of net-me­ter­ing and other tech­ni­cal­i­ties should be ad­dressed on pri­or­ity to meet the coun­try’s en­ergy needs,” said Inam ur Rah­man, CEO, Reon En­ergy Lim­ited. Ease in fi­nanc­ing of so­lar power projects shall en­cour­age ro­bust in­vest­ments in so­lar en­ergy sec­tor. With sun en­ergy present in abun­dance in Pak­istan, so­lar en­ergy tech­nolo­gies shall help save on elec­tric­ity bills for both busi­nesses and house­holds.

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