DFCC finances first grid connected solar project in Sri Lanka

Solar energy has been touted as the green energy category with the highest potential and the future of Sri Lanka’s green energy drive.  It is a resource that is not only sustainable for energy consumption but also renewable. DFCC bank leads the way in financing renewable projects undertaken by the private sector in Sri Lanka.  In August 2014, DFCC Bank financed Sri Lanka’s first commercial scale grid-connected Solar Power Project with a term loan of Rs850 million (approx., USD6.5 million) out of a total cost of Rs 2.5 billion (approx. USD 19 million).

Financing renewable energy project in Sri Lanka is based on a 20-year tariff agreement, where the project developer enters an agreement with the government for 20 years.  Using this, DFCC structured the financial solution sought by the borrower and will be assisting the promoter from concept to completion. The project is under implementation and expected to be completed this year.  When completed, it will help reduce government’s reliance on high cost, environmentally unfriendly thermal power projects.  This will also set the stage for the other energy developers and equity investors to increase their focus on this sector.

This project was given a Merit Award in the ADFIAP 2015 in the Outstanding Development Project Award under the Environmental Development category.