Suppliers of renewable accessories are struggling to open letters of credit (LCs) due to banks’ inability to finance imports with the US dollar, despite a surge in demand for solar products of 100-200% during a recent power crisis. The government aims to achieve 40% of electricity production from clean energy by 2041. In January, credit facilities for solar importers were reduced, resulting in the requirement to deposit 100-110% of import payments in advance.
Some traders had to lobby the central bank for LC approvals. The increased demand for solar accessories led to billions of dollars in imports. However, the banks’ reluctance to open LCs has disrupted the regular business cycle. Solar entrepreneurs faced complications importing solar accessories, and the opening of an LC, which usually takes a day, now takes six to seven months. Solar panel imports declined from 20,000-25,000 units worth $1.0-$1.3 million annually to 8,000-10,000 units. The demand for solar products increased by 30-40% compared to the previous year.
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