Business partners are an important link in our value chain. The key players include multilateral and bilateral institutions that provide lines of credit and technical assistance, local participating credit institutions which retail such funds and suppliers of goods and services that sustain our day-to-day operations. We share complementary business goals with our business partners and hence, strive to maintain healthy and lasting relationships for mutual benefit.
Founded in 1955, on the recommendation of the first World Bank mission to Sri Lanka (then Ceylon), DFCC Bank (then Development Finance Corporation of Ceylon) has, since then, developed and nurtured strong relationships with numerous institutions with similar development financing goals. Our key business partners in this context include The World Bank, the Asian Development Bank, KfW (Germany), FMO (Netherlands) and the European Investment Bank (EIB). We have functioned as the project manager in implementing credit programmes; administered grant funds for market development, capacity building and smart subsidies; and been an effective participating credit institution for on-lending funds to end users.
DFCC Bank has earned due recognition as a competent and successful programme developer and manager in these varied spheres. Our exemplary role in mainstreaming the renewable energy sector in Sri Lanka on market principles through two successive World Bank-assisted projects (1997 - 2011) led to landmark transformational impacts in the country in the areas of technology, financing and regulation.
In March 2014, the Government of Sri Lanka appointed DFCC Bank to administer the EIB-funded EUR 90 million Sri Lanka SME & Green Energy Global Loan scheme. DFCC Bank is also one of the three intermediary banks participating in the scheme. Renewable Energy and Energy Efficiency investments will receive 30% of the loan with the balance 70% for investments in SMEs. The credit line funds up to 50% of eligible investment costs in LKR or USD at an attractive fixed interest rate for up to 15 years. The take up has been excellent during the first year of operation with 7,002 million (46%) of the credit line committed for 84 projects by 31 March 2015. Disbursements during the period amounted to 2,585 million.
Out of the LKR 7,002 million committed, LKR 2,547 million will cover seven grid connected renewable energy projects (Five mini hydro, One wind and One solar) with a targeted capacity addition of 27.8 MW. The solar power project is a dedicated 10 MW solar PV farm to be connected to the national grid, which is the first large scale plant in the industry. Successful implementation of this project should spur further development as previously seen in the rapid growth of private sector mini hydro power and wind power projects. These projects will contribute to achieving the country’s targets in power generation from non-conventional renewable energy sources and towards fulfilling its desire for energy security.
The balance LKR 4,455 million committed will fund 77 SME projects in diverse industry sectors in 16 out of 25 administrative districts in Sri Lanka. The sectors include construction, education, hospitals, hotels, printing & publishing, retail trade, rice processing, tea manufacturing, vehicle service & repair and various manufacturing industries.
The 84 projects approved thus far are expected to provide over 1,300 direct employment opportunities with over 95% arising from SME investments.
It is DBB’s policy that goods and services are procured in a fair, timely and economically effective manner. The supplier selection process is governed by the DBB procurement policy. Suppliers undergo an extensive evaluation process which takes into account the price, quality, after sales support, timeliness of delivery and technical capacity. Further, suppliers who have been selected previously, but have not been considered by the Procurement Committee are subject to a periodic review once in three years. We mainly procure services from local suppliers, helping them to establish themselves and add repute to their brand name by doing business with DBB, while also extending financial services when required.