The Central Renewable Energy Fund (CREF) has been established as the Financial Management Mechanism under the National Rural and Renewable Energy Programme (NRREP), executed by the Alternative Energy Promotion Center (AEPC) with assistance in financial intermediation from a single Handling Bank and several Partner Banks.
Hence, the Central Renewable Energy Fund (CREF) is a financial intermediary mechanism established with the objective of effective delivery of subsidies and credits to the renewable energy sector.
Global IME Bank Ltd (GIBL) has been chosen as the Handling Bank or Apex bank from a transparent and competitive bidding process involving 15 “A” class commercial banks. As a result, GIBL has assumed the role of “Handling Bank” as per the MoU signed between Ministry of Science Technology and Environment (MoSTE) and GIBL on 9th Janauary, 2015, following a comprehensive competitive bidding process initiated by CREF, as under NRREP of AEPC. The MoU authorizes GIBL to house the CREF Secretariat and to carry out Investment Management, Refinancing and Subsidy Management functions in the role of a “Handling Bank” under the financial intermediation mechanism. GIBL has established a separate independent department to assume the responsibility of Handling Bank.
The financial intermediation mechanism in effect utilizes a basket fund under the name of CREF contributed by the Government of Nepal, Danida, Norway, DfID, KfW, GiZ, UNDP, SNV, World Bank, Asian Development Bank, UNCDF under the mediation of AEPC as under the National Rural and Renewable Energy Program (NRREP).
The fund is being channelized through GIBL in coordination with the CREF Secretariat and other BFI’s, which will assume the role of Partner Banks under the same project, to reach the targeted individual and institutional beneficiaries. The financial intermediary mechanism is depicted below;