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Kafalat Energy

Kafalat Energy is the result of a partnership between the European Union and Kafalat S.A.L. aiming at addressing energy constraints faced by SMEs, while ensuring the reduction of the negative impact on the environment.
This program provides eligible SMEs with loan guarantees for investments in Energy Efficiency (Program A) and Renewable Energy (Programs B and C), in order to finance: the purchase of equipment, the energetic audit fees, the engineering conception fees and the installation costs used either in electricity production by renewable resources or in reducing electricity and energy consumption.

Three types of investment and thus three types of guarantees are enrolled in the Kafalat Energy program: Program A - Energy Efficiency, Program B – Renewable Energy generation for internal use, Program C – Renewable Energy generation for sale to third parties.


Program A - Energy Efficiency


General conditions
  • financing amount: up to 100% of the financing needs of projects that focus on the adoption of or conversion to sustainable energy consumption (i.e. the optimization of an energy system to consume less).

Loan characteristics
  • currency: LBP,
  • loan amount: up to LBP 600 million, 
  • loan period: up to 10 years (including the grace period),
  • regressive monthly repayment,
  • grace period: from 6 to 12 months (on capital and interests), 
  • annual interest rate: 3%,
  • interest rates subsidized by the Central Bank: up to 4.5% over a maximum period of 7 years, 
  • fiscal stamps: 0.3% of the value of the Kafalat guarantee,
  • Kafalat guarantees the repayment of up to 75% of the outstanding amount to the Bank if the borrower fails to repay. The guarantee decreases according to the remaining due amount,
  • additional guarantees might be required, not exceeding 50% of the loan amount.

Eligibility
  • beneficiaries: individual, sole proprietorship, simple partnership, limited liability company, joint stock company, cooperative or NGO, not necessarily Lebanese but operating in Lebanon in one of the five subsidized sectors: Industry, Tourism, Agriculture, High Technology and Crafts,
  • start-ups and already existing SMEs,
  • SMEs with less than 40 registered employees (at the date of submission of the loan application),
  • SMEs currently benefiting or having already benefited from a Kafalat guarantee in other programs,
  • institutions should present annual audited accounting balances and financial statements certified by an auditing firm / an accredited freelance auditor.


Program B - Renewable Energy Generation for internal use

General conditions
  • financing amount: up to 100% of the installation of a renewable power generation system, and consumption of the produced electricity for internal use to replace fossil fuel based electricity.

Loan characteristics
  • currency: LBP,
  • loan amount: up to LBP 600 million, 
  • loan period: up to 15 years (including the grace period),
  • regressive monthly repayment,
  • grace period: from 6 to 24 months (on capital and interests), 
  • annual interest rate: 3%,
  • interest rates subsidized by the Central Bank: up to 4.5% over a maximum period of 7 years,
  • fiscal stamps: 0.3% of the value of the Kafalat guarantee,
  • Kafalat guarantees the repayment of up to 75% of the outstanding amount to the Bank if the borrower fails to repay. The guarantee decreases according to the remaining due amount,
  • additional guarantees might be required, not exceeding 50% of the loan amount.

Eligibility
  • beneficiaries: individual, sole proprietorship, simple partnership, limited liability company, joint stock company, cooperative or NGO, not necessarily Lebanese but operating in Lebanon in one of the five subsidized sectors: Industry, Tourism, Agriculture, High Technology and Crafts,
  • start-ups and already existing SMEs,
    SMEs with less than 40 registered employees (at the date of submission of the loan application),
  • SMEs currently benefiting or having already benefited from a Kafalat guarantee in other programs,
  • institutions should present annual audited accounting balances and financial statements certified by an auditing firm / an accredited freelance auditor.


Program C - Renewable Energy Generation for sale to third parties


General conditions
  • financing amount: up to 100% of the installation of a renewable power generation system in order to sell all or part of the produced electricity to others, including the public grid.

Loan characteristics
  • currency: LBP,
  • loan amount: up to LBP 1,320 million, 
  • loan period: up to 15 years (including the grace period),
  • regressive monthly repayment,
  • grace period: from 6 to 48 months (on capital and interests), 
  • annual interest rate: 3%,
  • interest rates subsidized by the Central Bank: up to 4.5% over a maximum period of 7 years, 
  • fiscal stamps: 0.3% of the value of the Kafalat guarantee,
  • Kafalat guarantees the repayment of up to 75% of the outstanding amount to the Bank if the borrower fails to repay. The guarantee decreases according to the remaining due amount,
  • additional guarantees might be required, not exceeding 50% of the loan amount.

Eligibility
  • beneficiaries: individual, sole proprietorship, simple partnership, limited liability company, joint stock company, cooperative or NGO, not necessarily Lebanese but operating in Lebanon in one of the five subsidized sectors: Industry, Tourism, Agriculture, High Technology and Crafts,
  • start-ups and already existing SMEs,
  • SMEs with less than 40 registered employees (at the date of submission of the loan application),
  • SMEs currently benefiting or having already benefited from a Kafalat guarantee in other programs,
  • institutions should present annual audited accounting balances and financial statements certified by an auditing firm / an accredited freelance auditor.

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