LILONGWE, JULY 11, 2022 – Standard Bank Plc today proudly announces the introduction of loans packages to suppliers and users of solar power and other renewable forms of energy as part of the bank’s commitment to contribute to economic growth through responding to the country’s current energy deficit.
The loan packages are available to both individuals and corporates in the form of Finance Leases, Term Loan, Stock Finance and Working Capital financing through the bank’s Consumer and High Net Worth (CHNW), Business and Commercial Clients (BCC), and Corporate and Investment Banking (CIB) segments, with technical expertise and deal structuring support through the bank’s Vehicle and Asset Financing unit (VAF), according to the bank’s Head of Client Solutions Ewen Hiwa.
“Malawi has not been spared by the global energy crisis manifested by supply shortages and sharp increase within the prices of electricity and petroleum, among other forms of energy. To respond to the urgent need to provide alternative or complimentary energy sources, Standard Bank is making available this facility to both individuals and companies, allowing them to purchase and import renewable energy supplies based on their needs,” he said.
Hiwa explained that the four forms of accessing the renewable energy financing have been designed to suit the needs of customers in all key business segments.
Finance Leasing is provided where the assets can be recognized and traced by serial numbers. Under finance lease, customers can acquire solar powered irrigation equipment, solar powered water pumps, solar powered mini-grid, solar farms, and any other solar powered solution, with the underlying facility being repaid over an agreed period.
Term Loan applies where customers purchase any solar-powered solution that does not have a recognizable serial number. Stock financing supports companies that import renewable energy technology for resale to other entities and individuals. This support comes in form of short to medium term financing repayable over a tenor of up to 180 days.
The fourth and final option is working capital financing which supports the short-term working capital needs of renewable energy companies, allowing them to access finance as a bridging or scaling support depending on the needs of their businesses.
“The facility is expected to alleviate the current energy supply gap, which has resulted in reduced productivity, supply bottlenecks and an increase in the cost of production. With renewable energy financing Standard Bank clients are assured of consistent and reliable energy supply,” said Hiwa.
Expanding Renewable Energy Financing
Standard Bank is making its renewable energy financing facility widely available to ensure that all client segments are not left out.
Customers in Private, Executive Banking, Corporate and Investment Banking, Business and Commercial will find the facility suitable to maintain productivity in their personal and business life.
“With due regard to the reality of modern life, the facility has been made available to all clients, whether in power production, power retail and individual use. Use cases include manufacturing, food processing, production, agricultural activities, medical service operators the hospitality industry and water purification,” he said.
Hiwa said individual users are also eligible to get financing for home energy needs.
“At Standard Bank we believe Malawi is our Home and we are confident that renewable energy will drive the nation’s growth. Impacting positively on the economy and local communities”, said Hiwa.
The duration of the financing (whether finance lease or term loan) includes the period for acquiring and repayment of each solution, its installation and commissioning. Term facilities have a maximum repayment period of 10 years. To ensure the best experience, all importation will be undertaken by carefully selected suppliers.
According to Hiwa, the renewable energy suppliers have been considered based on their reputation, and the ability to provide warranty to clients.
Equipment Financing through finance lease will be made available through either the Vehicle and Asset Finance (VAF) department or the Investment Banking division of Standard Bank. If a client opts for a term loan, stock financing or working capital financing these will be provided through the bank’s Business and Commercial Clients segment, he added.
Disruptions to national electricity grids due to climate change disasters and a spike in fossil fuel prices due to supply constraints resulting from the Russo-Ukraine war have made financing of the renewable energy sector more urgent than ever.
Following the ravages of Cyclone Ana in January, Malawi lost over half of its national electricity output. Suppliers of renewable energy sources now need financing to plug the energy deficit created by the tropical cyclones which Standard Bank Plc has stepped in to offer.
