International Finance Corporation (IFC), a member of the World Bank Group is extending a $12.5 million risk-sharing facility to NDB Bank of Sri Lanka to support the country's power-generation capacity while addressing climate change.
IFC says it will share NDB Bank's risks to help finance a larger quantum of renewable energy projects, including mini-hydro and wind power projects in Sri Lanka.
The projects are expected to provide economic benefits for local project developers, including small and medium enterprises.
The initiative is part of IFC's strategy to help the private sector mitigate climate change impacts while continuing to meet significant infrastructure gaps in South Asia.
NDB Bank CEO Russell de Mel said lucrative mini-hydro energy options are limited while opportunities in wind power are growing and bankers now need to secure projects with a different risk profile for funding.
"The risk sharing agreement with IFC protects NDB from possible risks and enables expanding its exposure to renewable energy projects," he explained.
Paolo M. Martelli, IFC Director for South Asia, said, the initiative will support Sri Lanka's efforts to increase private participation in wind, hydro, and biomass projects.
"With most of the country's power generation reliant on fossil fuels, this project will help the country diversify its energy infrastructure," Martelli added.
IFC will share its financing, project-structuring capability, and benchmark data for renewable energy technologies with Sri Lanka.
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