Pan Asia Bank breaks new ground with green lending

Thursday, 10 October 2013 00:00 -     - {{hitsCtrl.values.hits}}

Key financial institutions around the world have been adding products to their lending portfolios with a view to help protect the environment and control global warming. Entrepreneurs and certain individuals making use of this opportunity have tapped such offerings to build environmentally friendly sustainable buildings, start projects, purchase machines or equipment and also to operate businesses reducing the carbon footprint. Following are excerpts of an interview with Pan Asia Banking Corporation PLC Deputy General Manager and Head of Treasury Richie Dias on green lending initiated in Sri Lanka in agreement with Global Climate Partnership Fund (GCPF)   By Ashwin Hemmathagama Q: What made Pan Asia Bank consider funding green initiatives? A: Protecting the environment has always been a key priority at Pan Asia Bank. We are committed to fund green economic activities such a renewable energy and energy saving projects, in line with our CSR policies. But due to highly volatile interest rates, funding such initiatives become somewhat of a difficult task for any financial institution.     Q: How did you manage to evade the interest rate volatility? A: We entered into an agreement with the Global Climate Partnership Fund (GCPF) to raise US$ 20 million through a seven-year senior unsecured loan. GCPF is an investment fund, which provides financing for sustainable energy projects. The German Federal Environment Ministry, KfW, the Development Bank of the German Federal Government, the Ministry of Foreign Affairs of Denmark and IFC are the key stakeholders in GCPF. Deutsche Bank AG is the investment manager for GCPF. This funding will enable us to systematically build our green lending portfolio of economically viable and climate friendly projects.     Q: But do you have the necessary technical expertise to monitor a green initiative? A: Yes, we possess the necessary expertise in key areas which we have identified over the years based on the customer demand. In addition, GCPF also has agreed to provide us with technical support to further strengthen our capabilities.     Q: How do you plan to make use of this credit line? A: Protecting the environment is very important at this juncture. These funds will be utilised to finance renewable energy and energy efficiency projects in Sri Lanka at special interest rates. Retail customers could also utilise these funds to finance activities such as purchasing an energy efficient refrigerator, putting up a solar panel on a roof, importing a hybrid motor vehicle, etc. We are confident that this funding will create a perfect opportunity to generate long-term sustainable economic benefits to uplift the living standards of the people by creating cost effective energy for businesses and employment, while paving the way to be more responsible towards preserving our environment. In addition to being able to contribute positively towards arresting global warming, this initiative will also result in many strategic economic benefits to the country through the development of renewable energy sources such as solar energy, wind power and biomass. It would also reduce Sri Lanka’s vulnerability to global oil price volatilities.     Q: How can a customer obtain a facility making use of the green initiative you offer? A: We invite prospective clients who are interested in availing funding for the renewable and energy efficiency projects to visit any of our branches or to call the hotline (011) 4667222.