Sidbi ropes in BEE to promote green tech for MSMEs

The Small Industries Development Bank of India (SIDBI) has signed an agreement with the Bureau for Energy Efficiency (BEE) to create energy efficient technologies for the MSME sector.

The agreement will also help in creating awareness and capacity-building of local business development service providers to implement similar technologies, an official release issued said today.

"The agreement will facilitate energy efficiency improvement through capacity-building among MSMEs and extend financial support for preparing investment-grade proposals for energy efficiency improvements," Sidbi Chairman and Managing Director Sushil Muhnot said.

Sidbi and BEE are working as co-implementing agencies for preparing a World Bank-funded project titled 'Financing energy efficiency at micro, small and medium enterprises (MSMEs)'.

The project is also supported by the Global Environment Facility.

The main objective of the project is to improve efficiency and reduce green house gas emissions through commercial investments in energy efficiency goods and services among the target MSME clusters, the release added.

The potential energy efficiency market is estimated at over USD 3.1 billion and most of this potential lies with the 3 million SMEs which contribute to about 60% of the country's GDP.

The agreement with BEE involves developing an integrated approach with financial support to eligible proposals for adopting energy efficient technologies and measures, Muhnot said.

"In addition to reduction in direct energy intake, implementation of potential programmes can produce additional positive environmental impacts from reduced combustion of fossil fuels," he added.

The Lucknow-based state-run lender has been focusing on promoting funding clean technologies/production process under bilateral lines of credit from KfW of Germany and the Japan International Cooperation Agency.

These schemes have a two-pronged approach -- concessional lending to encourage investment in green/energy efficient technologies and to generate and disseminate cluster-specific information, the release added.

Under the Japanese assistance, Sidbi has already provided assistance to over 2,000 units with aggregate assistance of over Rs 800 crore for cleaner production and energy saving investments, Muhnoot said.

He added that to address environmental and social issues, the bank is planning to use an environmental and social risk management framework, called 'Small and medium enterprise finance and development project' and is being funded by the World Bank.

The project has already supported India SME Technology Services, a firm promoted by Sidbi and leading public sector banks, to prepare a carbon credit guidebook for MSMEs, update its existing basket of 800 technologies and flag them as carbon-free, clean, energy efficient technologies.

Project has initiated steps, in association with the science and technology ministry, to evolve a policy document on Technology Vision for MSMEs- 2020'.