Companies in Pakistan considering renewable power projects of up to 10 megawatts can now get discounted bank financing for letters of credit (L/Cs), according to the central bank

The State Bank of Pakistan (SBP) says it has introduced the initiative, which includes an option for longer-term financing, to help the country meet increased electricity demand.

Preferred projects

Under the new scheme, preferential financing will be provided through banks and development finance institutions for new imported and locally manufactured plant, machinery and equipment.

The SBP says preference will be given to projects in less developed areas of the country.

L/C arrangements

Financing will be available for L/Cs established for import or purchase of new plant, machinery and equipment from 1 December 2009 to 30 June 2012 only.

Longer-term refinancing may be provided for up to 100 per cent of financing provided by banks to eligible borrowers, according to the SBP.

The scheme aims to make it possible to provide preferential financing over a period of up to ten years for developers of alternative energy projects.

This article represents the views of the author and not necessarily those of the ICC or any of the other partners in DC-PRO.