Climate Financing at DFCC Bank, Sri Lanka - UN ESCAP Karunathilake_Sri Lanka.pdf · Email: Nalin...
Transcript of Climate Financing at DFCC Bank, Sri Lanka - UN ESCAP Karunathilake_Sri Lanka.pdf · Email: Nalin...
ClimateFinancingatDFCCBank,SriLanka
DFCCBANKPLC
DFCCBank,wassetupin1955asSriLanka’sfirstDevelopmentFinanceInstitution.Thebank is renownedforitsprojectfinancing andSMEfinancingexpertise.
Governmenthasalwaysheldaminorityownership stake.TheBank’s shareshavebeenlistedsince1956.
InOctober2015,DFCCBankanditscommercialbanking subsidiary amalgamated- DFCC isnowafullserviceLicensedCommercialBank.
MarketcapitalizationofLKR34.5billion (USD230million) - 1.26%oftheColombo StockExchange
TotalAssetsLKR290billion (USD1.93billion)
Rating- National:AA-(lka)Fitch;International:B+(Fitch) andB(S&P)
Vision: “Tobetheleadingfinancialsolutionsprovidersustainablydevelopingindividualsandbusinesses”
DFCCBank&ClimateFinance
ClimateFinanceinSriLankahasmainlyconsistedoffinancingprivatesectorRenewableEnergy(RE)generationandEnergyEfficiency(EE)initiatives.
Theimpetusforfinancingcamethrough twolandmarkprojects– EnergyServicesDelivery(ESD)Project(1997-2002)andRenewableEnergyforRuralEconomicDevelopment(RERED)Project(2002-2011)fundedbyWorldBank&GlobalEnvironmentFundandimplementedbyDFCCBank.
ESDandREREDprojectsfunded218.7MWofgridconnectedminihydropowerand10.8MWofwindpowercapacity.
Theoff-gridcomponentoftheprojectprovidedelectricitycloseto140,000householdsthroughsolarhomessystemsandcommunitybasedmicro-hydrosystems.
•1984- AnOff-Grid SolarHomeSystemassemblyplant•1996- SriLanka’s1st privatesectorREgeneration project, a0.96MWmini-hydro•2010- SriLanka’s1st privatesectorWindproject (10MW)•2016- SriLanka’s1st privatesectorgridscaleSolarproject (10MW)•2016– SustainableBiomassbasedpowerproject (4MW)
PioneeringrolefundingREProjects
•56MWofcapacitywill beaddedthroughgridconnected:•hydro(22MW)•wind(20MW),•solar(10MW)• sustainable bio-mass(4MW)projects.
DFCCBankiscurrently
managingaEUR90mEuropeanInvestmentBankcredit
line forSME&GreenEnergy
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DomesticSourcesofClimateFinance
•EIBSME&GreenEnergycreditlinewasfullyallocatedin2015.•E-Friends(RevolvingFund)tobelaunched–onlyforSMEs•However,endingofcreditlinesdidnotleadtoaslowdowninREinvestment!
Bankfinancing- Ownfundsand/orfromCreditLines
•CFVentures,LankaVentures(LVL)providedequity/quasi-debtforREprojects•LVL,nowanaffiliate,wasset-upbyDFCCBankasoneofLanka’sfirstVentureCapitalfirms
VentureCapital
•byRECompanies/DedicatedFunds(e.g. LVLEnergyFund)•DFCChasinvestedinLVLEnergyFund
PrivateDebt/PreferenceShare/Equityissues
•DFCCmanagedthe1st listingofanREIPP- Vallibel PowerErathnePLCin2006•OtherREfirmshavesincebeenlisted
ListingonColomboStockExchange
•noexchangerisk•However,domesticlong-termdebtfinancingisavailableonlyonvariablerates(otherthanfromtheEIBcreditline)- Interestrateriskcouldbeabsorbedduetohighfeedintariffs.However,thecurrentpolicyintentionistogoforauctionbasedtariffs.LackoffixedrateLKRfinancingisadrawback
AdvantageofDomesticFinancing
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SustainableBankingPrinciples- anIndustrywideCommitment
InNovember2015,participatingSriLankanbanksincludingDFCCBank,adoptedtheSustainableBankingPrinciples undertheSustainableFinance
Initiative(SFI)
Createsajointinitiativethatpromotesbest
practicesinSustainableFinance.
Willbuildindustrywidecapacity in
environmentalandsocialriskmanagement
FirststepinaprocessthatwillmakeSriLankaapartofagrowinggroupofemerging
countrieswherebanksandgovernmentsarecreatingsustainable
financeframeworksandincentives.
SustainableBankingPrinciples
BusinessActivities:Environmentaland
SocialRiskManagement
BusinessOperations:
EnvironmentalandSocialFootprint
Rightsoftherespectivestakeholders
FinancialInclusion
E&SGovernance Promote“EthicalFinance”
Promote“GreenEconomy”growth CapacityBuilding
CollaborativePartnerships
Promotetransparencyandaccountability
No“racetothebottom”
ThankYouforYourAttention!
NalinKarunatilekaVicePresident– ProjectManagement&BCP
DFCCBankPLC73/5,GalleRoad,Colombo 3,SriLankaTel.+9411-2442442, Fax.+9411-244376Email:[email protected]
www.dfcc.lk