Recording another first, DFCC Bank PLC, renowned for being the pioneer in renewable energy financing, will soon add solar energy to its renewable energy portfolio.
The bank recently approved a project loan to Saga Solar Ltd.; a ground breaking initiative undertaken by a team of investors and backed with the expertise of professionals in the Solar Energy sector. Analysed and structured by DFCC’s own multifaceted team, this transaction speaks volumes of the bank’s commitment to develop the renewable energy sector as well play a pivotal role in the economic development of the country. Solar energy has been regarded as the green energy category with the highest potential and is expected to form the future of Sri Lanka’s green energy drive. There have been solar applications in the country before on a small scale such as domestic solar PV systems, solar powered drip irrigation, street lamps and electric fences. However, this project will be the first large scale commercial solar project with grid connectivity. The project will add 10 Mw of generating capacity and is located at a 45 acre site in Hambantota.
DFCC Bank has structured the financial solution sought by the borrower and is assisting the project promoter from concept to finish. The bank is confident that this project will set the stage for other solar energy developers, lending agencies and equity investors to increase their focus on the solar energy sector.
Founded in 1955, DFCC Bank is one of the oldest development banks in Asia, and recently celebrated its Diamond Jubilee. The bank possesses a proud heritage of achievements, which includes financing new economic sectors in the country and being the wind beneath the wings of many trail-blazing entrepreneurs especially in their early and risky start-up stages. Today these sectors have become mainstream businesses that support the national economy in many ways.
The bank’s foray into the renewable energy sector is significant. In 1994, the bank financed Sri Lanka’s first ever privately owned, grid connected mini-hydro power plant, with both long term debt and equity. The bank also financed a pioneering manufacturer of turbines for local and foreign hydro power plants. This project was the recipient of ADFIAP’s award for ‘Outstanding Project – Technology Development’. Assistance has also been extended to local hydropower developers to set up projects overseas.
DFCC Bank was also the pioneer financier for private sector wind power projects in the country, when it part-financed the first wind power project in 2010. The bank’s involvement extended beyond mere financing – to facilitating the introduction of a cost-based, technology specific tariff structure. This enabled projects using wind technology to be commercially viable and has spurred development of this form of renewable energy in Sri Lanka. The success of these pioneering projects has catalysed the setting up of several other ventures resulting in thriving industries. Today, hydro and wind power combined supplies nearly 10% of the country’s power needs.
DFCC Bank has now merged with its commercial banking subsidiary; DFCC Vardhana Bank, and has transformed into a full-service bank. The combined entity offers a breadth of seamless banking solutions which brings together the expertise of a pioneer development bank and the energy of a dynamic commercial bank. Its services are delivered through a network of 137 branches and service points located island-wide.