THE World Bank has decided to extend the commitment period for its guarantee facility under the Sustainability Energy Financing Project (SEFP) to June 30, 2017 despite the expiry date on August 17 last year.
The decision was available only to Fiji following a request from the Fiji Development Bank to extend the commitment period by another four years.
World Bank senior country officer for the Pacific Islands, Robert Jauncey said it had been supporting commercial banks in Papua New Guinea, Solomon Islands and Fiji to provide finance to small businesses and households wanting to install new renewable energy facilities.
"The bank has been guaranteeing such loans, with financing from the Global Environment Facility (GEF)," he said.
"As part of this project, the World Bank has agreed to extend the period for offering guarantees to commercial banks in Fiji, which had the strongest demand for the facility, to provide further financing for renewable energy.
"The bank has been pleased with the way that commercial banks, small businesses, and households in Fiji have taken up the opportunities offered under this program."
In a statement, FDB said other regional countries participating in the program had been excluded because of the low uptake of the project guarantee over the five-year period that it had been in effect.
"The guarantee provides not only a level of comfort to financiers such as ourselves but it also reduces the security requirement on the part of the borrower as an inducement to take on renewable and sustainable energy projects," said FDB chief executive officer Deve Toganivalu.
"Those projects will not only help reduce our high fuel import bill but also help reduce our carbon footprint.
"I would encourage businesses that are interested in pursuing renewable and sustainable energy projects to consider putting applications early because there is a limited time period to the guarantee and to apply early means you have a longer period to effect repayments until the guarantee expires."
FDB signed on as a participating financial institution for the World Bank's SEFP on July 6, 2011 and has since approved financing for 14 projects valued at $3.4million.
The 50 per cent guarantee under WB's risk sharing fund covers loans approved for the use of solar, hydro, coconut oil fuel and energy saver equipment, FDB said.
"Through the SEFP initiative, FDB offers a sustainable energy financing facility (SEFF) that allows eligible farmers and businesses to borrow at concessional interest rates through the Reserve Bank of Fiji's import substitution and export finance facility (ISEFF).
Loan applications for ISEFF are subject to RBF conditions while SEFF is available under normal lending conditions," FDB said.