IFC, NDB Bank to expand renewable energy financing

IFC, a member of the Word Bank Group, 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.

IFC is extending a $12.5 million risk-sharing facility to NDB Bank to support the country’s power-generation capacity while addressing climate change. The project is expected to produce 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. “Lucrative mini-hydro energy options are becoming scarce while opportunities in wind power are growing. Bankers now need to secure projects with a different risk profile for funding,” said Russell de Mel, NDB Bank’s CEO. “The risk sharing agreement with IFC protects NDB Bank from possible risks and enables expanding its exposure to renewable energy projects,” he explained.

IFC will share its financing, project-structuring capability, and benchmark data for renewable energy technologies with Sri Lanka. IFC also will further enhance NDB Bank’s ability to appraise projects using these technologies.

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.”

The project follows a unique distributed-generation approach, with smaller-scale production of electricity at or near energy demand improving reliability of supply and lowering pollution by using renewable sources.