The Central Bank of Iraq has taken a new step to push people toward solar energy.
According to officials, the bank has set the interest rate for its solar energy loans at no more than 2.5%. The goal is simple: make it easier and cheaper for citizens and businesses to invest in renewable energy.
Rafal Jameel, Director of Initiatives at the Central Bank, said the bank launched several programs, including loans to help people buy solar panels. These programs also come with simpler procedures to encourage more participation.
She explained that the interest rate was lowered after many citizens and energy companies complained that the original rate was too expensive. After reviewing those concerns, the Central Bank capped the rate at 2.5%. Under the new structure, the Central Bank’s own interest share is just 0.5%, much lower than the current 5.5% general policy rate.
Even with these changes, demand is still very weak.
Jameel said only a small number of state-owned banks are taking part, which is a problem since most Iraqis receive their salaries through those banks. She made it clear that the Central Bank cannot force banks to participate, but she strongly urged them to step up and support the energy sector.
That support, she said, could include financing solar factories, energy companies, and household solar projects. The message from the Central Bank is clear: affordable financing is now available, but banks need to play their part for the initiative to succeed.
