Sustainable Finance Scheme: providing financial assistance to energy efficiency projects

Sustainable Finance Scheme: providing financial assistance to energyefficiency projects

SustainableFinance Scheme was initiated during 2012-13 by SIDBI to provide financialassistance to sustainable advancement projects that supply power efficiency andcleaner production but not comprised under the international or bilateral linesof credit.

A wide varietyof sustainable development projects like renewable Power projects; Bureau ofEnergy Efficiency, green buildings, green microfinance, and eco-friendlylabeling, etc. are involved inside the scope of this scheme. In addition, thefinancial assistance has also been rendered to Energy Service Companies andOriginal Equipment Manufacturers involved in manufacturing energy efficient andreliable production machine.

Rate of Interest

Under thisscheme, the rate of interest applicable would be the standard lending rate bythe credit rating of MSMEs.

Eligibility Criteria

• New and existing MSME units aresuitable for this scheme.
• The MSMEs that are alreadyrunning, they should have a satisfying track history of past performance andhealthy financial position
• Existing MSMEs that are not aninsolvent to institutions or banks are eligible to apply for it
• The units should have a leastcredit rating of investment grade or its equivalent according to the in-housecredit rating model.
• Under this scheme, all sustainabledevelopment projects like renewable energy projects, Bureau of EnergyEfficiency (BEE) star rating, green microfinance, green buildings, andeco-friendly labelling are covered, and MSMEs related to these fields areeligible.
• Business having any kind ofpotential CP investments including waste management can get support from it.
• OEMs which produce productsrelated to energy efficient, cleaner production, green machinery, equipment aresuitable. But either the OEM should be an MSME or it should be providing itsproducts to a large number of MSMEs
• Sustainable Finance Schemeprovides assistance and provides term loan or working capital to the ESCOs thatimplement EE, CP, and Renewable Energy Project. But to be eligible for thisgrant, the ESCO should be an MSME or otherwise the unit to which it deliversits offerings has to be an MSME.

Objective of the Sustainable Finance Scheme

The schemeaims to assist the whole value chain of energy efficiency, sustainabledevelopment projects and cleaner production that lead to significantimprovements in EE, CP sustainable development in the MSMEs and which arepresently not covered under the existing sustainable financing lines ofcredits.