KARACHI: The State Bank of Pakistan (SBP) has launched three Shariah Compliant Refinance Schemes for investments in the renewable energy and agri-related projects to provide level playing field to Islamic banking system, according to a press release issued on Friday.

Currently, SBP offers various subsidised refinance facilities to the banks and development finance institutions to channelise funds into priority sectors. However, the SBP did not provide details on the subsidised rates for the scheme.

“However, addition of Shariah compliant financing facility for renewable energy, financing facility for storage of agricultural produce and refinance facility for modernisation of SMEs will meet the long-awaited demand of the industry, especially for the agriculture and SME sectors,” said the SBP.

Mudarabah-based facilities would provide long-term cheaper liquidity to the end users. The financing under Islamic financing facility for renewable energy will be available in two categories including sponsors desirous of setting up renewable energy power projects with capacity ranging between 1-50MW and consumers

willing to install facility using renewable energy source for generation of electricity ranging between 4KW-1MW for own use or for supplying to the distribution company.

Published in Dawn, February 23rd, 2019