Bank Alfalah’s Green Energy Loan program supports individuals and businesses in installing solar energy systems. This loan aims to promote sustainable energy solutions by offering financial assistance for setting up solar power generation ranging from 4 kW to 1000 kW. It also facilitates net metering, allowing users to sell excess electricity back to the grid.
Table of Content
Features and Benefits
- Customized Financing: Tailored financial solutions to meet individual needs.
- Affordable Rates: Competitive mark-up rates for easy repayment.
- Flexible Tenure: Loan repayment period of up to 5 years.
- Enhanced Limits: Opportunity to increase loan limits if needed.
- Replacement Financing: Option to finance new equipment after paying off the initial loan.
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Eligibility and Requirements
To qualify for the Alfalah Green Energy loan, applicants must meet specific criteria. They need to provide a clean e-CIB report and demonstrate that they have been in business for at least three years. Additionally, they must submit utility bills from the past year and a non-objection certificate if the property is jointly owned. For businesses, the installment amount should not exceed 20-30% of the average peak bill over the past three months.
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Suppliers and Mark-up Rates
Solar equipment suppliers must be registered with the Alternative Energy Development Board. Payments will be made only to pre-approved vendors. The mark-up rate is variable, linked with Kibor plus a spread, as approved by the authority. This ensures that borrowers get the best possible rate according to market conditions.
Payment Frequency and Tenure
The principal loan amount can be repaid monthly, quarterly, or bi-annually, while the mark-up payments can be made monthly or quarterly. The maximum financing tenure is five years, with a three-month grace period to ease the initial financial burden on borrowers.
Down Payment and Security
The loan requires a down payment, which varies depending on the type of property:
- Self-Owned Premises & Agricultural Facilities: 20% down payment.
- Rental & Leased Facilities: 25% down payment.
For security, the loan requires hypothecation of equipment, personal guarantees, security cheques, and insurance. Additionally, there may be a need for a mortgage of property or cash equivalents, ensuring that the bank’s investment is secure.
Limit Caps
Loan limits depend on property ownership and business type:
- Rental Premises Residential Customers: Loans above 2.5 million require collateral.
- Owned Premises Residential Customers: Loans above 4.0 million require collateral.
- SMEs & Commercial Businesses: Loans above 10.0 million need adequate collateral.
- Agricultural Customers: All loans require collateral equivalent to the loan amount.
- Maximum Loan Amount: 400 million for a single borrower.
Processing Charges and Insurance
Processing charges are in accordance with the Schedule of Charges (SOC). Insurance for the first year is charged upfront and included in installments for the subsequent years, ensuring comprehensive coverage for the solar equipment and associated risks.
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Conclusion
The Alfalah Green Energy Loan program is designed to make the transition to renewable energy both accessible and financially feasible. With flexible terms, competitive rates, and supportive features, it provides a comprehensive solution for those looking to invest in solar energy systems, promoting a sustainable future while offering financial stability and benefits.