The Executive Board Member of the National Investment Bank (BNI), Abdul Jivane, said this Wednesday, November 23, during the first Regional Conference on the Regulatory Framework for the Off-Grid Power Sector, that high interest rates and collateral requirements make it difficult for companies in the energy business to finance.
“The lack of knowledge of investment opportunities and technologies (due to poor dissemination of information), poor access to bank financing as a result of high interest rates and guarantee requirements, and also the regulatory and institutional conditions, in which we register low levels of coordination between the different actors, constitute challenges to financing,” explained Abdul Jivane, who was speaking during the panel debate on financing opportunities and challenges for the off-grid sector.
The official also considered that “with the off-grid energy sector growing, there is an increasing need to create competitive financial instruments and fiscal incentives for it to provide quality and affordable services.”
Also on the same panel, Steffen Beltz, portfolio manager at KfW bank, gave a presentation on his institution’s financing approach for the off-grid energy sector in the region and in Mozambique, and highlighted that “the level of taxation, including import duties and VAT, hampers the accessibility of renewable energy products to rural consumers in the country, further reducing market access and growth.” It continued:” Access to finance, particularly from local commercial financing institutions, remains a critical constraint for the sector, even for local companies that have been limited to international sources of finance.”
This first Regional Conference on the Regulatory Framework for the Off-Grid Power Sector: A Regional Perspective is organised by the Government of Mozambique, the Netherlands Development Organisation (SNV) and is supported by the Governments of the United Kingdom and Sweden.