The Solar Water Heating Loan Facility

The Tunisian Solar Water Heating (SWH) loan facility is a joint initiative of the United Nations Environment Programme, the Tunisian National Agency for Energy Conservation and the Société Tunisienne de l'Electricité et de Gaz (STEG).

PROSOL - What it is

This SWH loan facility is a financial support mechanism:

• To create credit facilities using STEG as a channel for recovering the monthly loan payments;
  
• To help local banks build loan portfolios in the Renewable Energy area;
  
• To provide an interest rate subsidy to the potentialcustomers;
  
• To provide to the end user a capital subsidy to make SWH cost competitive with LPG (Tunisian government has passed a new law to provide a 20% subsidy on a SWH capital cost)
  

PROSOL - How it works

UNEP and ANME establish a 2 US$ million Facility:

• To provide to the end user an interest rate subsidy that will significantly lower the financing cost for a SWH loan;
  
  
• To provide to the end user a capital cost subsidy;
  
  
• STEG will promote the use of SWH by channeling loan repayments through STEG customer's utility bill;
  
  
• The monthly loan repayments are structured to match current monthly spending on other forms of energy;
  
  
• The facility will phase out over a period of 12-18 months, leading to 30,000 SWH installations financed.

PROSOL - What it does

• Encourage increased lending by local banks by reducing the risk in entering a new market segment;
  
  
• Support the development of partnerships between banks and SWH suppliers;
  
  
• Lower substantially by 7-8 points the interest rates charged for SWH financing;
  
  
• Help to shift the market from a cash market to a credit based market;
  
  
• Promote a competitive market for SWH by strengthening the demand side;
  
  
• Address the " high up-front cost " issue of the SWH, which is a barrier for the customer.

PROSOL - What it may achieve

• Ensure long-term viability of the entire sector;

• Leverage the US$ 2 million funds by 10 to 12 times in bank financing;
  

• Build confidence among the banks and expand lending to the Renewable Energy sector;

• Assist the Tunisian Government in developing its SWH policies.

Related Documents

Baseline study for:
Tunisia (PDF - 1,2 MB)

Partners

Italian Ministry for Environment and Territory

Risoe