Emirates Development Bank, the state-owned lender focused on financing the UAE's priority sectors, has launched a Dh100 million ($27.2 million) solar energy finance programme as part of the country’s 2050 net-zero targets.
The financing for micro, small, and medium enterprises (MSMEs) across a range of sectors in the UAE’s economy will help bolster the adoption of green energy solutions, the lender said in a statement on Thursday.
The new green energy financing programme aims to accelerate the shift toward cleaner energy sources and address cost barriers that could hinder its progress.
The financing schemes offers medium and long-term loans and working capital of up to Dh5 million to MSMEs, particularly directed at solar energy projects.
Financing packages include support for technology providers and equipment suppliers as well as options for related sectors including hydrogen production and its use, waste management and water plants, EDB said.
“It is timely that we have chosen the year we are proudly hosting the crucial Cop28 climate talks to launch our solar energy financing package,” Ahmed Al Naqbi, EDB's chief executive, said.
EDB will offer companies a “competitive source of financing” to help the UAE transition towards clean and sustainable energy solutions.
“This will reduce dependence on non-renewable sources and address climate change,” he said.
“By partnering with key government authorities and approved renewable energy consultants and contractors, we also aim to provide comprehensive support throughout the process.
“In the race to net zero, no one can be left behind.”
EDB offers direct and indirect financing with long tenors and higher loan-to-value (LTV) ratios as well as lower rates and interest payment grace periods.
The lender’s newest scheme comes with up to eight-years tenor for structured finance projects and solar panels, with grace periods for borrowers of up to six months.
It is offering a 100 per cent (LTV) ratio and will be providing finance for the full appraised value or purchase price of the asset.
The lender is at the heart of the UAE’s efforts to the boost growth of SMEs and start-ups in the Arab world’s second-largest economy.
EDB contributed more than Dh3.5 billion to the country’s economy last year and supported the creation of more than 12,000 industrial jobs.
It aims to provide Dh30 billion in support to 13,500 companies, which, in turn, will contribute Dh10 billion to the country's economic output, EDB said in its 2022 annual report last month.
Last year, EDB approved Dh6.1 billion in loans, of which Dh1.8 billion was approved for SMEs.
The bank is targeting the approval of loans worth Dh6 billion or more this year, to match the size of funding last year, Mr Al Naqbi told The National in March.
In August, EDB signed a preliminary agreement to launch supply-chain financing and working capital solutions for small and medium-size enterprises in the country.
The initiative is being carried out in collaboration with Abu Dhabi-based Trade Capital Partners, a technology platform that delivers working capital finance solutions to SMEs, and is part of EDB’s efforts to support start-ups through its network of government and corporate partners, the lender said at the time.