UAE development bank in $27m SME solar energy drive

State-run Emirates Development Bank has launched a solar energy finance programme to support micro, small, and medium enterprises (SMEs) in the UAE to overcome cost barriers.

The initiative will allocate AED100 million ($27.22 million) to support the adoption of green energy solutions, focusing on solar energy initiatives, the UAE state-owned Wam news agency reported.

The programme offers medium- and long-term loans and working capital of up to AED5 million, mainly for solar energy projects.

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This includes support for technology providers, equipment suppliers, energy consumers across various sectors, and other related energy initiatives such as electricity, hydrogen production and use, waste management, and water plants.

Ahmed Mohamed Al Naqbi, CEO of Emirates Development Bank (EDB), said the programme will offer a “competitive” source of financing to help UAE companies transition towards clean and sustainable energy solutions.

“This will reduce dependence on non-renewable sources and address climate change. Our goal is to encourage businesses of all sizes to transition to more sustainable energy solutions and help develop major new renewable energy projects.

“In the race to net zero, no one can be left behind,” Al Naqbi stated.

EDB offers up to eight years-long tenor loans for structured finance projects and solar panels, with grace periods of up to six months.

Under the scheme, the bank will provide a 100 percent loan-to-value ratio, capex funding for solar panels, as well as greenfield and brownfield structured project financing.

Approved contractors of solar panels will gain access to finance, allowing them to manage cash flow, invest in new projects, or cover their operating expenses.

EDB is mandated to approve AED30 billion in financing support to 13,500 companies within its five priority sectors – renewables, food security, manufacturing, technology and healthcare – by 2026.

Dubai’s largest lender, Emirates NBD launched a sustainable finance framework on Wednesday, setting out its plan to expand its involvement in this area across all divisions, in both its regional and international markets.

The UAE will host the Cop28 conference in Dubai from November 30 to December 12.