ECF guarantee for energy efficiency projects
The Energy Conservation Fund (ECF) has established a Sustainable
Guarantee Facility (SGF) to provide repayment guarantees to financial
institutions (PFIs) for loans made to targeted energy efficiency
The ECF has allocated Rs 50 million for this purpose and these loans
could be obtained from banks for prospective industrialists, USAID
Senior Energy Consultant M. S. Jayalath told the Daily News.
He said that with this allocated sum of Rs 50 million they intend to
support Rs 400 million worth of projects in the country. At present they
are in the process of identifying projects to set up energy efficient
methods in the industrial sector.
The main purpose of the SGF is to overcome the major barrier faced by
energy efficiency projects, namely the lack of collateral, by providing
a repayment guarantee that will act as a collateral substitute, he said.
Lending institutions that provide financial assistance to energy
efficiency projects will now have the option of requesting repayment
guarantees from ECF when supporting energy efficiency investments, he
An operating guideline for this purpose was finalised by the ECF and
PFIs at a recently concluded stakeholder-training workshop, conducted by
USAID under the South Asia Regional Initiative for Energy.
The purpose of these operating guidelines is to provide guidance to
SGF staff and to participating bank staff on the policies and procedures
for considering loan guarantees under the Sustainable Guarantee
Further technical assistance is provided by USAID to the ECF, Banks
and Developers to develop pilot projects. Registration of institutions
for pilot projects is currently being carried out by the ECF.
First three to five projects are expected to receive guarantees from
the ECF by end of February. Any industrialist who has a project proposal
on energy conservation for an industry could obtain loans from any bank,