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UAE introduces innovative solar energy financing program for SMEs

This program is designed to assist SMEs in overcoming cost barriers associated with adopting sustainable practices, including the use of solar energy.

UAE introduces innovative solar energy financing program for SMEs
[Source photo: Anvita Gupta/Fast Company Middle East]

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The UAE’s Emirates Development Bank (EDB) has unveiled a solar energy finance program to assist local micro, small, and medium enterprises (mSMEs) across various sectors in the country. This initiative is designed to tackle the financial obstacles that may have impeded the adoption of sustainable energy practices within these enterprises.

To achieve greater implementation of green energy solutions, particularly solar energy, the initiative is set to allocate $27.2 million. This program will provide financial support through medium- and long-term loans and working capital of up to $1.3 million for solar energy projects.

EDB highlighted that the support offered extends to various stakeholders, including technology providers, equipment suppliers, energy consumers spanning various sectors, and other related energy initiatives like hydrogen production and waste management.

“This will reduce dependence on non-renewable sources and address climate change,” said Ahmed Mohamed Al Naqbi, CEO of Emirates Development Bank. EDB will also offer a 100% loan-to-value ratio and will provide finance for the asset’s full appraised value or purchase price.

Likewise, the bank intends to offer capital expenditure financing for solar panels and structured project financing for greenfield and brownfield renewable energy projects. EDB stated that this approach would facilitate the advancement of larger-scale clean energy initiatives, allowing contractors to effectively manage cash flow, invest in new projects, or address operational expenses while awaiting customer payments.

The introduction of this program aligns seamlessly with EDB’s overarching mission to promote a robust, sustainable, and self-sufficient economy within its five priority sectors: renewables, food security, manufacturing, technology, and healthcare. EDB aims to realize these objectives by the year 2026.

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