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State Bank of India (SBI), today entered into a  Memorandum of Understanding (MoU) with KfW CARBON FUND for jointly exploring financing of sustainable Clean Development Mechanism (CDM) opportunities in various development and industrial sectors.

 

The MoU was signed by  Sri.S.K.Bhattacharyya, Managing Director & Chief Credit and Risk Officer, State Bank of India and Ms. Karin Sittler,  Vice President, KfW Carbon Fund, Germany.  

 

KfW Bankengruppe's Carbon fund  has been set up in co-operation with the Federal German Government in order to purchase emission credits from  CDM-projects mainly for German and European companies.  KfW acquires the CERs in its own name at fixed or flexible prices and on the basis of long term purchasing agreements in line with international standards. The obligations under these agreements are backed by KfW and its AAA rating.  This offers security to the sellers of CERs and investors, and enhances the creditworthiness of the projects.

 

Speaking on the occasion, Sri. Bhattacharyya,  said, "SBI is the first Bank among public sector banks to come out with a Green Banking Policy which aims to  reduce its direct and indirect GHG emissions.  Internally the Bank is taking a host of steps like complete switch to Compact Fluorescent Lamps, solar energy, waste management etc to mitigate its GHG emissions. The Bank's policy on Carbon Credits assists  its borrowers to avail the benefits of Clean Development Mechanism. Several steps are being taken by the Bank to increase the awareness of Global warming and Climate change.  Apart from the business opportunities, as the premier Indian Bank, we are committed to promoting  sustainable development."

 

SBI provides a single point delivery of services related to Carbon Credits / Clean Development Mechanism (CDM) business, under the Kyoto Protocol, to its customers. These include apart from finance to implement CDM projects,  advisory services  and value added products like securitization of carbon credit receivables and carbon credit delivery guarantees.  The Bank has identified 32 Nodal Officers  at its LHO and Mid Corporate Regional Office Centres for mobilizing Carbon Credit related business and spreading awareness about this emerging  business opportunity.

 

KfW Bankengruppe is the promotional Bank of the Federal Republic of Germany, with AAA rating, founded in 1948 with headquarters  in Frankfurt.  The shareholders are Federal Republic of Germany (80%) and the German Federal States (20%).  Financing investments in Europe, promoting development in developing countries, international project finance and export finance  etc are the major activities of  KfW.

 

The association with KfW, Germany's promotional Bank, would increase SBI's capabilities in Carbon Credit segment especially in development of CDM projects,  sale of CERs of SBI's customers,  upfront financing against  CER receivables, bundling of SME units for CDM registration, onlending for CDM projects and improving the skills of SBI staff in the area of Carbon Credit.

 

"As I see it, the association with KfW Carbon Fund will benefit a large number of small and medium scale  units in India as they will get the benefit of a complete package of services and working with reliable partners with proven experience in the Carbon Credit business." Sri. Bhattacharyya said.

 

Ms. Karin Sittler,  Vice President, KfW Carbon Fund, stated that the proposed tie up would leverage on the increased reach of SBI and provide a forum for joint cooperation of two large Banks in mitigating the effects of  climate change.  

 

Sourced From: Adfactors Public Relations Pvt Ltd