German Development Bank (KfW) and Pakistan Microfinance Investment Company (PMIC) have been implementing a program called PRIME – PMIC-KfW Renewable Energy Initiative through Microfinance in Pakistan that aims to support the financing of quality verified Pico PV, Solar Home Systems and Solar Irrigation Pumps for households and small businesses in poor grid and off-grid locations in the rural and peri-urban areas of Pakistan.
The program was launched in August 2019 with 8 Microfinance Providers (MFPs). It has enabled a responsible financing mechanism by lending to its microfinance partners, building their capacity, providing support on sensitizing awareness, and strengthening their assessment of energy needs. KfW has provided PMIC with a EUR 15 million subordinate loan that qualifies as Equity subordinated capital [EUR 15,000,000.00] or USD equivalent according to the regulations of the SECP.
KfW has recently approved an additional EUR 5 million subsidy scheme for the program to address the affordability issue among MFP clients and help MFPs in financing high quality solar systems to rural communities in Pakistan. Under this subsidy scheme, 40% subsidy shall be provided on financing VeraSol verified plug-and-play solar home systems packaged with a DC fan.