DFCC Bank, the pioneer financier for private sector renewable energy projects in Sri Lanka
May 13, 2021
Since the bank’s infancy in 1955, DFCC Bank is associated with an innovative and catalytic role in the development of the private sector which still continues to date, regardless of the institution’s recent transformation into a fully-fledged commercial bank. The Bank has been a pioneer lender towards energy generation projects from time when the demand for energy was accelerated by the boost of industrialization and urbanization. DFCC Bank has come forward to support numerous ventures that were initiated to meet this energy demand by means of renewable energy sources whilst also protecting the environment by reducing the carbon footprint.
Among the key renewable energy projects and ventures financed and co-financed by DFCC Bank are ; Sri Lanka’s first utility-scale grid connected private sector mini hydro power project, the 0.96 MW “Hydrotech Lanka Dick Oya”, Sri Lanka’s only megawatt-scale hydro power turbine manufacturing entity – VS Turbo (Pvt) Ltd, Sri Lanka’s first private sector wind power project of 10MW developed by Senok Wind Power (Pvt) Ltd at Mampuri, Kalpitiya, the country’s first grid scale solar power plant – the 10MW project developed by Saga Solar (Pvt) Ltd.
DFCC Bank was also appointed as the Administrative Unit for the GOSL/World Bank/Global Environment Facility funded Energy Services Delivery (ESD) Project. The goal of the project was to encourage the private sector to enter the electricity generation space for both grid connected and off-grid applications using environmentally sustainable renewable energy technologies.
In 2006, the Bank co-managed the first ever Initial Public Offering (IPO) and listing of shares of a renewable energy based independent power producer – Vallibel Power Erathna PLC. This paved the way towards the listing of other renewable energy-based power generation firms on the Colombo Stock Exchange, thus enhancing the financing and investment options available to such firms and the investing public.
During 2014-2017, DFCC Bank also implemented the GOSL/European Investment Bank funded EUR 90 million SME & Green Energy Project, which gave a further boost to renewable energy investments in Sri Lanka.
DFCC Bank in 2017 seized the opportunity to finance distributed solar power generation on third party rooftops by introducing a new model. As land has become a precious resource in urban areas, rooftop solar projects help conserve land while generating environmentally friendly electricity to the national grid.
In addition to this, DFCC Bank participates in the GOSL/ADB funded Rooftop Solar Power Generation Line of Credit. As a part of this scheme, DFCC Bank will provide up to 100% financing for residential systems up to Rs 1.5 million and up to 80% financing for all other systems.
While these are just a few of the steps taken by DFCC Bank to ensure support for renewable energy projects in Sri Lanka, DFCC Bank has also taken this commitment beyond our tropical shores.
Over the years the Bank through DFCC Consulting has undertaken several consultancy projects including financial advisory services, renewable financial product development, trainings & study tours. Training bankers in Nepal on appraisal and follow-up of mini hydro power projects in 2017, acting as financial advisers to USA based South Asia Energy Management Systems Inc to source funds from FMO Entrepreneurial Development Bank for their 18-MW hydro power project in Uganda in 2008 and development of an “Adaptable Solar Loan Product for MFIs” funding off-grid solar in Uganda In 2014 by engaging with Uganda Energy Credit Capitalization Corporation (UECCC) are some of the projects undertaken by DFCC Consulting.
Further DFCC Consulting has repeatedly held study tours in Sri Lanka for visiting delegates from countries such as Cambodia, Ghana, India, Mozambique, Nepal, Philippines, Rwanda, Uganda and Vietnam. The purpose of these tours was to share Sri Lanka’s success story in the development of the renewable energy sector, both grid connected and off-grid.
About DFCC Bank
DFCC Bank is a full-service Commercial Bank with a legacy of 65 years as one of Sri Lanka’s foremost financial conglomerates offers a gamut of commercial and development banking services. The Bank was ranked amongst Business Today’s Top 30 Corporates in Sri Lanka and was also positioned amongst Brand Finance’s Top 100 Most Valuable Brands, 2020. DFCC Bank is rated [SL] AA- Stable by ICRA Lanka Limited and A+ (lka) Stable by Fitch Ratings Lanka Limited.