Creating Bridges for a Sustainable Nation: Bank of Ceylon and Hayleys Solar join hands

In conversation with Mr. Hasith Prematillake - Managing Director of Hayleys Fentons Limited

Sri Lanka’s leading bank, Bank of Ceylon (BOC), constantly showcases its commitment to sustainability by focusing on solar energy initiatives in partnership with several companies. Hayleys Solar, the renewable energy arm of Hayleys Fentons, is one such company, the BOC has converged with recently, to illuminate a path towards a greener future for Sri Lanka.

As Hayleys Fentons pioneers cutting-edge engineering solutions, BOC stands as a pillar of support for this purpose, offering tailored financing options that make solar energy affordable and accessible to consumers across all layers of society.

In a recent interview, Mr. Hasith Prematillake - Managing Director of Hayleys Fentons Limited, discussed the evolution of Hayleys Solar, its strategic collaboration with BOC, and how this collaboration has created value for their business stakeholders.

Following are the excerpts of the interview:

01. Can you share with us the journey of Hayleys Solar and how it has evolved?

Hayleys, established by Mr Chas. P. Hayley, a British trader in Galle, began its journey in 1878 and has a 146-year legacy. Similarly, Fentons was founded by a British chartered electrical engineer Herbert Fenton in 1919. In 2016, Hayleys PLC acquired 75% of Fentons, marking the inception of Hayleys Fentons Limited. Notably, Fentons stands as one of Sri Lanka's oldest engineering companies.

Hayleys, the largest public listed conglomerate in Sri Lanka, spans 16 diverse business sectors. Impressively, Hayleys contributed 5.5% to Sri Lanka's export revenue in 2023, with export revenue constituting approximately 62% of its total revenue. Hayleys Fentons focuses primarily on engineering, establishing itself as a key player in Hayleys PLC's Projects and Engineering Sector. Hayleys Solar emerges as a pivotal aspect, specialising in engineering procurement and construction (EPC) of solar power plants.

In addition to solar projects, Hayleys Fentons ventures into ICT, mechanical, electrical and plumbing (MEP), security and communication, uninterrupted power supply (UPS), lighting solutions, facility management and a diverse portfolio of critical engineering services. Striving for excellence, Hayleys Fentons aims to lead in all sectors it represents, notably dominating the solar sphere and electromechanical engineering services.

Hayleys Solar, established in 2011 has a decade of experience in the newer, rapidly growing renewable energy sector. Since 2018, it has ascended to the position of a leading player, surpassing 200MWp of total capacity, contributing to the country's total installed solar capacity, which currently stands at

900MWp across the country. This significant achievement solidifies Hayleys Solar's standing as a formidable force in the industry.

02. What were some of the key factors that led Hayleys Solar to choose Bank of Ceylon as one of its partners??

Hayleys Solar is committed to providing its solutions to startups, larger corporations, Micro Small and Medium Enterprises (MSMEs), and residential clients across the societal spectrum. Our goal is inclusivity, aiming to serve all demographics and geographical regions within the island nation.

BOC is a key partner for us, with one of the most extensive networks islandwide, coupled with a reputation for trustworthiness. When customers seek to embark on a solar investment journey—a long-term endeavor rivaling investments in housing—they require a reliable collaborator like Hayleys Solar and dependable financing from institutions like BOC. With an investment lifespan of up to 20 years, the choice of partnership is critical for sustained success and support.

BOC further distinguishes itself by offering some of the most competitive solar loan rates in the market, currently as low as 7% with repayment periods of up to 7 years, making solar energy solutions even more affordable.

This strategic alliance not only ensures financial viability for our customers but also highlights our commitment to providing accessible and affordable renewable energy solutions to empower individuals and businesses alike.

03. How do you think this loan scheme has benefited various segments of the country, including the MSMEs?

Essentially, what this entails is that consumers, both individuals and businesses, can own a solar power system or plant minimising additional expenses. When they invest in a solar power system through the BOC loan scheme, the monthly loan instalment they pay over a period of up to seven years is significantly lower than their monthly electricity bill.

To illustrate, if someone's electricity bill amounts to Rs. 30,000, their loan instalment would range around Rs. 15,000-16,000. For a bill of Rs. 40,000, the installment would be about Rs. 20,000-22,000. As for SMEs facing a Rs. 200,000 electricity bill, their instalments would hover around Rs. 100,000- 120,000. This translates to substantial monthly savings by installing a solar power system and generating free electricity. Consequently, this surplus cash can then be utilised to settle other monthly expenses, such as water bills, telephone bills, or any other recurring costs.

04. How has the partnership with Bank of Ceylon contributed to the growth and success of your company?

We're only at the initial stages of our partnership and anticipate significant potential ahead. When considering the purchasing power of Sri Lankan consumers today, it's evident that their financial capabilities are constrained.

With limited spending power, their investment capacity is correspondingly restricted. This is where BOC comes in, offering solar power systems at affordable interest rates. This accessibility enables consumers to invest in solar power systems with ease, and without hesitation.

Affordability empowers consumers to acquire solar power systems that generate free electricity for up to 20 years. Moreover, it contributes to substantial savings for the country, curtailing the outflow of US dollars spent monthly on coal and fossil fuel purchases for power generation.

Additionally, it significantly reduces CO2 emissions, promoting environmentally friendly, green electricity generation. Thus, the initiative benefits consumers, the national economy, and the environment alike, fostering a win-win scenario for all stakeholders involved.

05. Looking ahead, how do you envision the continued collaboration between Hayleys Solar and the Bank of Ceylon contributing to your company's future endeavours and national sustainability goals?

In terms of sustainability goals, Sri Lanka has set a target of achieving 70% of renewable energy in its energy generation by 2030. To reach this objective, the country needs to harness around 8,000 megawatts of renewable energy. Out of this, approximately 4,000 megawatts are intended for solar power installations.

Presently, the nation has only achieved about 950 megawatts, indicating a substantial gap that needs to be bridged within the next four to six years. This endeavour requires a significant investment of 11 billion US dollars, equivalent to about 3 trillion Sri Lankan rupees.

Given the scale of this financial requirement, it becomes evident that the government and consumers alone cannot shoulder this burden. Consequently, the support of a robust financial institution is crucial to facilitate this transition towards renewable energy.

Such an investment not only contributes to environmental conservation but also yields economic benefits by reducing the outflow of funds spent on fossil fuels. Solar power presents a particularly attractive option due to its one-time investment nature and relatively short payback period of less than three years.

Moreover, solar power installations require minimal maintenance once operational, making them a sustainable and cost-effective energy solution in the long run. By embracing solar power, Sri Lanka can make significant strides towards achieving its sustainable development goals by 2030.

Furthermore, Hayleys Solar, equipped with the capacity to deploy large-scale solar power installations across the island, and BOC, possessing the financial prowess to support such ventures, play pivotal roles in realising these ambitious renewable energy targets.

Hayleys Solar aims to make solar power more attainable across all socioeconomic strata, from affluent to economically disadvantaged communities. By improving accessibility to solar power, Hayleys Solar seeks to harness the sun's abundant resources to benefit society at large.