Presentation on theme: "BDL Environmental Loans"— Presentation transcript:
1 BDL Environmental Loans Banque Du LibanFinancing Unit
2 BDL Mission StatementBy virtue of the Code of Money and Credit of 1963, the Central Bank of Lebanon’s general mission is to “safeguard the national currency in order to ensure the basis for sustained social and economic growth”. This mission specifically consists of:Safeguarding monetary and economic stability;Ensuring the soundness of the banking sector;Developing money and capital markets;Regulating and developing the payment, clearing and settlement systems as well as electronic financial operations.
3 BDL Tools The Central Bank controls banks’ liquidity: by monitoring or adjusting discount rates;by imposing on banks reserve requirements on their deposits in LBP.The Central Bank can also regulate banks’ credit in terms of volume and type:by imposing credit ceilings to limit credit risk;by directing credits toward specific sectors or purposes.
4 TargetThe Central Bank of Lebanon can facilitate financing investments in specific economic sectors by exempting banks from part of the required reserve requirement to finance these projects at low cost.
5 Environmental LoansBDL is currently working with Ministry of Power, UNDP, the European Union (EU), and the Lebanese Center for Energy Conservation (LCEC) to provide potential investors in green technology, specifically in energy saving and renewable energy technology, with low cost financing and medium to long term maturities.
6 MOU Signed between BDL, UNDP and LCEC Develop a vehicle to finance Energy Efficiency and Renewable Energy, called NEEREA (National Energy Efficiency and Renewable Energy Action).Cooperate to involve International Donors and organizations (i.e. EU) to support NEEREADevelop awareness and capacity building activities among Lebanese Commercial Banks and end consumers
7 Residential Projects (Buildings, Houses), Other sectors… Sectors that can benefit from the NEEREA mechanismIndustrial Sector,Touristic Sector,Commercial Sector,Medical Sector,Educational Sector,Residential Projects (Buildings, Houses),Other sectors…
8 Environmental Projects Energy Related (NEEREA Mechanism):Any undertaking related to Energy Saving and Renewable Energy.Lighting, Ventilation systems, Generators, Heating and Cooling, Refrigeration, Furnaces, Boilers, Solar Energy, Photovoltaic, Biomass, Wind energy, Buildings envelope, IT Equipment Applications.Non-Energy Related:Any project concerned with pollution abatement, solid waste and waste water treatment, recycling.Ecotourism, organic agriculture, and landscaping.
9 Environmental Projects New Projects:Repayment period up to 10 years, beginning after the end of the grace period.Grace period ranging from 6 months to 4 years.Re-modeling Existing Projects:Repayment period up to 10 years, including the grace period.Grace period ranging from 6 months to 2 years.
12 Rated Environmental Projects The value of the loan extended to finance Environmental Projects would be calculated as follows:The cost of the property is excluded from the above scheme.The certification system developed by LEED is adopted, or equivalent classifications from other internationally recognized systems.Nature of ProjectRatingLoan AmountNew ProjectNot ratedEnvironmental CostCertified15% of Total Project ValueSilver25% of Total Project ValueGold35% of Total Project ValuePlatinum45% of Total Project ValueExisting ProjectRated or Not Rated
13 The Remaining Amount of the Assigned % of the Rated Project Financing Cost for Rated Environmental LoansThe Remaining Amount of the Assigned % of the Rated ProjectLBP: Interest + Commissions ≤ 3%USD: Cost of Funds + 2%Energy RelatedInterest + Commissions ≤LBP: 3% - 50% (1Yr. TB. Yield) ≈ 0.59%USD: Cost of Funds + 2% - 50% (1Yr. TB. Yield)
14 Grant Contract Signed between BDL and EU A grant contract was signed to support investments in sustainable energy in the amount of €12,200,000. The Central Bank would, pay a grant to subsidize loans extended to finance energy projects, with a maximum amount of $1m. energy loans:15%Of the value of the non-subsidized energy related loan5%Of the value of subsidized energy related projectsFunds are allocated to the project after BDL/EU Consultant approves the technical study proposed.BDLThe grant money allocated would be disbursed upon final execution, and after technical validation.
15 Thank You Banque Du Liban Financing Unit Phone: +961 1 743469 Fax:PO.Box