Karandaaz supporting Green Financing for Sustainable Development
Karandaaz Pakistan is strengthening renewable energy sector by helping more businesses find access to capital through green financing schemes. Karandaaz, as part of its Green Investments portfolio, recently entered into a partnership with Reon Energy Limited, a wholly-owned subsidiary of Dawood Lawrencepur Limited. Under this partnership, Karandaaz has extended a financing facility of PKR 500M to bridge finance the working capital requirements of REON Energy and enhance its capacity to undertake large-scale capital projects in C&I sector.
Reon Energy, established in 2015, is Pakistan’s leading solar and storage solutions specialist with deep domain expertise in project development, financial advisory, engineering, procurement, and construction (EPC), and asset performance management. The PKR 500M facility from Karandaaz will be utilized by Reon to make payments for purchase and installation of imported and local solar equipment including panels, inverters, batteries and other related products for onward installation at specific projects. This Karandaaz financing facility will enable the execution of about 25 MW of solar projects per annum.
Talking about the significance of a shift to a greener energy mix, Mr. Waqas ul Hasan, CEO Karandaaz said,
Climate change induced shocks can be disastrous for any efforts geared towards Pakistan’s sustainable economic growth. Similarly, it is imperative that Pakistan’s demand and supply gap for energy is bridged to have a sustained and resilient progress. Pakistan has the potential to save up to 10-15% of primary energy supply through energy efficiency and conservation . Businesses must adopt resource efficiency and rely on green-energy sources because such steps will not only help Pakistan have a greener mix of energy but will also reduce financial and environmental costs for the country. To achieve all this, it is imperative that green energy solutions are easily and competitively available for businesses and the financial system is geared up to aid such adoption. Karandaaz is promoting access to the right mix of financial and physical resources for businesses offering renewable energy solutions and incentivizing businesses that have the foresight to want to adopt green energy solutions. Partnerships such as the one between Karandaaz and Reon will demonstrate to the formal financial sector that there are commercial and environmental dividends to be reaped by investing in green businesses.
Talking about Karandaaz’s partnership with Reon Energy, Mr. Navid Goraya, Chief Investment Officer Karandaaz said,
Our partnership with Reon is part of the efforts we are making to bridge financing gap and liquidity shortfalls common to EPC businesses in the green energy segment. Financing from formal channels for businesses offering green solutions remains diminutive in Pakistan. After analyzing the reasons behind it, Karandaaz offered a tailored financing product to Reon because banks traditionally are reluctant to offer financing solutions to EPC firms or for a renewable energy solution being installed at an SME. In such cases, neither the EPC nor the SME has collateral to offer and solar panels, for example, are rarely accepted as collateral by banks. Karandaaz is open to offering more of such innovative financing solutions for similar EPC contractors to help them meet their capital and liquidity needs so that they can offer affordable solutions to their customers.
Mr. Mujtaba Haider Khan, CEO Reon said,
Securing project financing from local or international sources can prove to be a critical step in the creation and growth of the renewable energy sector. This partnership with Karandaaz will not only help in diversifying the country’s energy supply and reduce dependence on imported fuels, but also foster economic development and jobs particularly in the renewable energy sector.
Reon is committed to a sustainable energy future to enable economic growth and greater wellbeing.
Energy lies at the heart of both the UN’s 2030 Agenda for Sustainable Development and the Paris Agreement on Climate Change. Experts believe that ensuring access to affordable, reliable, sustainable, and modern energy for all will open a new world of opportunities for billions of people through new economic opportunities and jobs, empowered women, children and youth, better education and health, more sustainable, equitable and inclusive communities, and greater protections from, and resilience to, climate change