UNB, Dhaka :
Bangladesh Bank will extend the tenure of loan repayment and reduce the interest rate on the credit to be given for the promotion of green energy, particularly the renewable energy sector.
Governor Dr Atiur Rahman announced the central bank’s decision at a conference on ‘Green Finance for Sustainable Development’ at Cirdap conference centre in the city.
Responding to a proposal in this regard, Atiur said the loan repayment tenure will be 5-15 years from the existing 3-10 years while the interest rate will be 3-7 percent instead of the existing 8-12 percent.
To make his announcement effective, the Governor directed the central bank officials to immediately issue a circular in this regard.
He also asked the department concerned of the Bangladesh Bank to form an advisory committee before the year-end comprising the stakeholders, particularly banks, investors and product manufacturers in the green energy sector to resolve problems through consultation.
NeoSTAR, a private intermediary agency, organised the function in partnership with German cooperation agency GIZ, Rahimafrooz Solar, EnegyPac, NCC Bank, IFIC Bank and NRB Global Bank.
EnergyPac’s CEO Nurul Aktar, Rahimafrooz Renewable Energy’s managing director Munawar Misbah Moin, GIZ representative David Peter Hancock and NeoSTAR CEO Edward Apurba Singha also addressed the function.
Making a clarion call for the central bank and other bank officials to change their mindsets for green projects, Dr. Atiur said, “Please, green your mind first before green financing…it’s more important to green your mind.”
He said Bangladesh Bank has been the pioneer in green financing among all the central banks in the world. “That’s why it has become a role model for others to follow.”
Atiur maintained that the Bangladesh Bank governor has been a member of UN committee to formulate green financing policy.
He asked the banks to carefully identify the green projects considering the core theme and their viability. “Sometimes, red projects take the advantage in the name of green.”
The governor urged the banks to spend their money from the corporate social responsibility (CSR) fund on setting up natural cold storage in each district to help farmers to preserve their produces in low-cost storage.
A local scientist has invented the cold storage, which is run by solar power. Bangladesh Bank provided money to implement this project in a northern district.
In his presentation, Rahimafrooz Renewable Energy managing director Munawar Misbah said the present disbursement profile is not satisfactory in bank loan and it needs simplification in loan due-diligence and collateral allocation.
He also said there is Tk 8,000 crore investment opportunity in the renewable energy sector.
Misbah urged the authorities concerned to address the issue of tenure mismatch in renewable energy project financing suggesting for loan tenure extension to five years from the current 3 for Solar Home System and biogas plant at the user level.
For solar mini-grid, he said it should be at least eight years, including a one-year grace period to be linked with private sector consumer credit scheme.
Misbah suggested for withdrawing the single borrower exposure limit related restriction in the bank loan disbursement like the conventional power plant projects are enjoying.
Bangladesh Bank will extend the tenure of loan repayment and reduce the interest rate on the credit to be given for the promotion of green energy, particularly the renewable energy sector.
Governor Dr Atiur Rahman announced the central bank’s decision at a conference on ‘Green Finance for Sustainable Development’ at Cirdap conference centre in the city.
Responding to a proposal in this regard, Atiur said the loan repayment tenure will be 5-15 years from the existing 3-10 years while the interest rate will be 3-7 percent instead of the existing 8-12 percent.
To make his announcement effective, the Governor directed the central bank officials to immediately issue a circular in this regard.
He also asked the department concerned of the Bangladesh Bank to form an advisory committee before the year-end comprising the stakeholders, particularly banks, investors and product manufacturers in the green energy sector to resolve problems through consultation.
NeoSTAR, a private intermediary agency, organised the function in partnership with German cooperation agency GIZ, Rahimafrooz Solar, EnegyPac, NCC Bank, IFIC Bank and NRB Global Bank.
EnergyPac’s CEO Nurul Aktar, Rahimafrooz Renewable Energy’s managing director Munawar Misbah Moin, GIZ representative David Peter Hancock and NeoSTAR CEO Edward Apurba Singha also addressed the function.
Making a clarion call for the central bank and other bank officials to change their mindsets for green projects, Dr. Atiur said, “Please, green your mind first before green financing…it’s more important to green your mind.”
He said Bangladesh Bank has been the pioneer in green financing among all the central banks in the world. “That’s why it has become a role model for others to follow.”
Atiur maintained that the Bangladesh Bank governor has been a member of UN committee to formulate green financing policy.
He asked the banks to carefully identify the green projects considering the core theme and their viability. “Sometimes, red projects take the advantage in the name of green.”
The governor urged the banks to spend their money from the corporate social responsibility (CSR) fund on setting up natural cold storage in each district to help farmers to preserve their produces in low-cost storage.
A local scientist has invented the cold storage, which is run by solar power. Bangladesh Bank provided money to implement this project in a northern district.
In his presentation, Rahimafrooz Renewable Energy managing director Munawar Misbah said the present disbursement profile is not satisfactory in bank loan and it needs simplification in loan due-diligence and collateral allocation.
He also said there is Tk 8,000 crore investment opportunity in the renewable energy sector.
Misbah urged the authorities concerned to address the issue of tenure mismatch in renewable energy project financing suggesting for loan tenure extension to five years from the current 3 for Solar Home System and biogas plant at the user level.
For solar mini-grid, he said it should be at least eight years, including a one-year grace period to be linked with private sector consumer credit scheme.
Misbah suggested for withdrawing the single borrower exposure limit related restriction in the bank loan disbursement like the conventional power plant projects are enjoying.
