GO GREEN WITH SIDBIGO GREEN WITH SIDBIGO GREEN WITH SIDBIGO GREEN WITH SIDBI 1

Energy Efficiency Financing in MSMEsEnergy Efficiency Financing in MSMEs

GO GREEN WITH SIDBI AND GIZGO GREEN WITH SIDBIGO GREEN WITH SIDBIENERGY MISUSED CAN NOT BE EXCUSED

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SIDBI – towards sustainable financingAbout SIDBI

SIDBI set up in April, 1990, under an Act of the Parliament for

Promotion Financing Development of MSME sector & Co-ordinate the functions of similar institutions Financial schemes:

•Direct as well as IndirectTerm loan and WCBill FinanceRisk Capital- Equity, subdebtVenture capitalGovt subsidy schemes

CONSERVATION - DOES NOT COST IT SAVES

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An overview of India’s Enery Scenario vis a vis MSMEs

MSME sector consumes almost half of the total MSME sector consumes almost half of the total energy consumption by industrial sector.energy consumption by industrial sector.

Many MSMEs are highly energy inefficient. Many MSMEs are highly energy inefficient. Energy cost, as also profits constitute 5% of Energy cost, as also profits constitute 5% of total sales. total sales.

Scope to reduce energy uses almost 25%Scope to reduce energy uses almost 25% Thus, EE can increase profit by 25%.Thus, EE can increase profit by 25%. To fill the gap in demand and to support To fill the gap in demand and to support

the country’s growing economy there is a the country’s growing economy there is a need for increased investment in need for increased investment in Renewable Energy (RE) Renewable Energy (RE) sector/technologies by MSMEs also.sector/technologies by MSMEs also.

ENERGY MISUSED CAN NOT BE EXCUSEDCONSERE TO PRESERVE

GO GREEN WITH SIDBIGO GREEN WITH SIDBIGO GREEN WITH SIDBIGO GREEN WITH SIDBI

SIDBI

• Recognising this SIDBI has taken Recognising this SIDBI has taken various initiatives for EE in MSMESvarious initiatives for EE in MSMES

– Specialised vertical for EE/CP financing Specialised vertical for EE/CP financing to operate EE/CP schemes and support to operate EE/CP schemes and support for MSMEsfor MSMEs

CONSERE TO PRESERVE

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SIDBI – Sustainable Financing

Objectives : Focused lending schemes to MSMEs directly and through intermediary

improve energy efficiency, protect environment and mitigate adverse impact of climate

change by reducing CO2 emissions and

enhance profitability of Indian MSMEs in their long run.

Benefits : Concessional Finance Capital subsidy for EE technology upgradation Lower power and fuel bill Quicker and higher return No collateral / third party guarantee upto Rs 1 Crore Equity/ Quasi equity/ Risk Capital assistance as per

eligibility

CONSERE TO PRESERVE

GO GREEN WITH SIDBIGO GREEN WITH SIDBIGO GREEN WITH SIDBIGO GREEN WITH SIDBI

SIDBI – towards sustainable financing

ACTIVITIES COVERED Energy Efficiency – equipments, green building Cleaner Production -

Waste Management –agro waste, industrial waste Fuel Switching- diesel/petrol to CNG/LPG, coal to oil/gas based furnace CDM- Jodhpur steel rerolling cluster has been registered under UNFCC

ESCOs – Energy Service Companies Renewable Energy –solar, hydro, bio mass, wind power

GO GREEN WITH SIDBIGO GREEN WITH SIDBIDON’T BE FUELISH

GO GREEN WITH SIDBIGO GREEN WITH SIDBIGO GREEN WITH SIDBIGO GREEN WITH SIDBI

Renewable Energy Projects

Renewable Energy –solar, hydro, bio mass, wind power etc. SIDBI working in niche area of EE in MSMEs for :

Captive as well as Non-captive use• Biomass based heat and power projects and industrial waste to-

energy projects for meeting captive needs • Biomass gasifiers for rural and industrial energy applications • Watermills/micro hydro projects – for meeting electricity requirement• Small Wind Energy & Hybrid Systems - for mechanical and electrical

applications, mainly where grid electricity is not available.

• Solar PV  Roof-top Systems for abatement of diesel for power generation in MSMEs

Assistance to offgrid project so far provided by SIDBI WIND MILL : 26 projects for Rs156 croreSolar Photovoltaic : 5 projects for Rs. 39 croreThrough IREDA : 25 projects for Rs.200 crore

GO GREEN WITH SIDBIGO GREEN WITH SIDBISAVE ENERGY - SAVE MONEY

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SIDBI’s Integrated Approach

Ministry of MSME subsidy - TEQUP

Finance Development

JICA, Japan- EE LoC

KFW, Germany-EE/CP LoCs

World Bank LoCs on E&S

WB-GEF Project

GIZ, Germany – EE TA

JICA, JapanEE TA

KFW, GermanyEE/CP TA

Sustainability HUB

LETS GO GREEN TO GET OUR GLOBAL CLEAN

UNIDO, IFC & EU

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EE-CP Line of Credits to SIDBI

• KFW Environmental Line - Euro 15.24 million Covered 39 projects covered.

• JICA Energy Saving Line Phase I - JPY 30 billion [Rs.15.8 billion] Provided assistance to more than 3400 MSMEs.

• JICA Energy Saving Line Phase II - JPY 30 billion [Rs.15.8 billion] Provided assistance to around 1849 MSMEs with aggregate assistance of around Rs.1789 crore

• KFW Environmental Line - Euro 38.50 million Provided assistance to around 293 MSMEs with aggregate assistance of around Rs.333 crore

• KFW Energy Efficiency Line - Euro 50 million Provided assistance to around 224 MSMEs with aggregate assistance of around Rs.179 crore

• AFD Energy Efficiency Line - Euro 50 million: provided assistance to around 1200 MSMEs

• Sustainable Finance Scheme of SIDBI - provided assistance of around Rs 450 crore to MSMEs

• Till now assisted more than 6500 Units • Disb. arround Rs 4700 crore • O/S Rs. 3022 crore

GO GREEN WITH SIDBI AND GIZGO GREEN WITH SIDBIGO GREEN WITH SIDBISAVE ENERGY - SAVE MONEY

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Scheme for Financing projects in MSME Sector

Parameter Norms

Purpose Investment in energy saving capital equipments / production processes improvements/technologies.

Minimum Assistance Generally not less than Rs.10 lakh

Overall DER 2 : 1

Interest Rate As per Credit Rating and 0.50% below the Normal Lending Rate.

Asset coverage Minimum 1.3 for manufacturing units / 1.75 for service sector units.

Repayment period Need based. Normally, should not exceed 7 years.

Eligibility Criteria 1. New / Existing MSME unit

2. Have a satisfactory track record of past performance and sound financial position; and

3. Score above the minimum investment grade raring as per SIDBI’s Extant Loan Policy

Any other incentive TEQUP/CLCSS/TUFS or any other Government Scheme benefit shall be available, if eligible.

GO GREEN WITH SIDBI AND GIZGO GREEN WITH SIDBIGO GREEN WITH SIDBIREDUCE – RECYCLE - REUSE

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SIDBI’s Loan Sanctioning Procedure under EE SIDBI’s Loan Sanctioning Procedure under EE & CP LoCs& CP LoCs

(i) List based approach under JICA and AfD LoCs

• An Energy Saving Equipment List (ESEL), an exhaustive list of energy saving equipments for various MSME sectors has been prepared by the consultant appointed by JICA. It takes into consideration the technology which results in saving of electricity by atleast 10%.

• The branch officers are required to check only that whether the proposed equipment is included in the ESEL or not.

 (ii) Tool based approach under KfW LoCs • A Loan Eligibility Assessment tool has been developed by the consultant

appointed by KfW. Besides, Energy Saving Equipment List also prepared.

• The branch officers are required to collect the input energy & production data (Prior and Post-Investment) from the borrowers and the same will be used for the loan eligibility assessment.

GO GREEN WITH SIDBI AND GIZGO GREEN WITH SIDBIGO GREEN WITH SIDBITHING THAT BURN NEVER RETURN

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Addressing Demand Side Issues EE Awareness Campaigns and Focused Group Meetings through

International Partners–

So far 40 Awareness campaigns in as many clusters and

15 Focused Group Meetings

Information Dissemination • 4 handbooks on EE measures in Ceramics, Engineering, Foundry

and F&V processing sectors released in Hindi and English and multiple languages (Gujarati, Marathi, Odiya, Kannada, Tamil & Bengali).

• 6 EE Posters – 3 General & 3 sector specific.

• Tip Sheets for increasing EE of MSMEs..

50 EE trainings for bankers – about 2500 bankers benefitted

TIME TO REALIZE – BE POWER WISE

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Impact So far

• More than 8000 MSMEs benefited through Sustainable Finance

• More than 920 million kwh of electricity saved annually

• Resulted in reduction of almost 850 kilo tons of CO2 annually

I DREAM GREEN – WHAT YOU

We Empower MSME We Empower MSME We Empower MSME We Empower MSME 14

SIDBI’s Achievements

• ADFIAP Award, 2012 under the category of Environmental Development particularly for CNG Taxi Financing Scheme, CNG Auto Rickshaw Financing Scheme and Energy Efficiency Lines of Credit.

• ADFIAP Award 2013 under Envirenment Category for it’s WB-GEF project (5 clusters) and pCDM (Jodhpur)

• SIDBI, the only Indian Institutional member of IDFC promoted by KfW – Expected to play a major role in the implementation of the proposed Global Climate fund of UN, using IDFC platform in India.

CONSERVE ENERGY ACHIEVE SYNERGY

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Thank You

Please Visit:www.sidbi.ingiz-indien@giz.de

LESS YOU BURN – MORE YOU EARNCUT EMISSIONS TO SAVE MOTHER EARTH