From Readiness recipient to accredited entity

The major milestone of ‘Identifying and Supporting Potential National Entities for accessing and utilizing GCF Resources efficiently and effectively in Pakistan’ (PAK-RS-002) was the accreditation of JS Bank at the 22nd GCF Board Meeting. Under this readiness grant, JS Bank received extensive support, including technical assistance in updating the entity’s Environmental and Social Safeguards policy with a local specialist and revising the entity’s gender policy with an international gender expert. The JS Bank has also participated in a climate finance readiness workshop and received guidance on potential concept notes.

Since becoming Pakistan’s second Direct Access Entity (DAE), JS Bank has developed a once Simplified Approval Process (SAP) concept note into a funding proposal (SAP024) to make net-metered renewable energy solutions a self-sustaining and growing market within Pakistan. The project will provide tailored financing solutions for distributed solar photovoltaic (PV) products to help bridge the financing gap for these investments in Pakistan, provide technical assistance to strengthen capacity of solar PV vendors and other key stakeholders, and raise market awareness of climate change risks and the benefits of renewable energy solutions.

By becoming accredited with the GCF, the JS Bank has access to GCF funding which provides the entity with the unique opportunity to avail a pro-rata risk sharing guarantee, something not fully available in Pakistani financial markets. The guarantee allows the bank to make solar energy more competitive by offering a hedge against non-performing loans, something that is necessary to develop a self-sustaining market for solar PVs. With the GCF guarantee facility, JS Bank can continue the existing initiative – soon to end otherwise – by the State Bank of Pakistan (SBP) which offers concessional loans to customers at a fixed rate of 6% in the local currency (Pakistani Rupee) to support the financing of renewable energy. Without this support, the lending rate would hover instead around 11% compared to a fixed 6% rate.

The JS Bank aims to offer simplified and accessible financing solutions to reach previously untapped market segments and users and has included a budget of up to USD 1 million to promote greater awareness of the project. This knowledge transfer will be supported by other significant social co-benefits, including a designated Women Entrepreneurship product for Solar Finance and the exploration of options to set up off-grid projects with educational entities, health institutions, industrial estates, and small and medium-sized enterprises (SMEs).