AEPC to Assume up to 20 Percent of Risk on Renewable Energy Projects Loans

Kathmandu; Alternative Energy Promotion Center (AEPC) will be bearing risk of up to 20 percent of the loans invested by banks in the projects under the Nepal Renewable Energy Program (NREP). For this purpose, the AEPC is entering into agreements with various banks.

According to Prem Sagar Subedi, deputy team leader of NREP, they have carried out agreements with eight banks so far. "Only on Thursday, we signed an agreement with Siddhartha Bank," he said.

Subedi said that the AEPC has inked agreements with Nabil Bank, NMB Bank, Global IME Bank, Laxmi Sunrise Bank, Himalayan Bank and Muktinath Bikas Bank, while it has taken forward the process to sign similar agreements with other banks. According to the agreement, the Sustainable Energy Challenge Fund (SECF) being operated by the center will take the risk of debt recovery of up to 20 percent of the loan issued by the bank. The move is expected to facilitate other banks also to invest in renewable energy projects, according to the AEPC.

Under the NREP, projects such as net metering of solar electricity, grid-tied solar projects up to 1 MW, waste-to-energy projects, mini and micro hydro, electric cook-stoves, and solar water pumps for irrigation are currently being implemented.

Subedi empasized that under the electric cook-stove promotion project, a program is currently underway to install electric stove systems in 75,000 households through various microfinance institutions in the country. The center expects that the credit risk reduction agreement made with banks will play an important role in increasing credit investment in these projects.