Sustainable Finance Scheme: providing financial assistance to energy efficiency projects
Sustainable Finance Scheme was initiated during 2012-13 by SIDBI to provide financial assistance to sustainable advancement projects that supply power efficiency and cleaner production but not comprised under the international or bilateral lines of credit.
A wide variety of sustainable development projects like renewable Power projects; Bureau of Energy Efficiency, green buildings, green microfinance, and eco-friendly labeling, etc. are involved inside the scope of this scheme. In addition, the financial assistance has also been rendered to Energy Service Companies and Original Equipment Manufacturers involved in manufacturing energy efficient and reliable production machine.
Rate of Interest
Under this scheme, the rate of interest applicable would be the standard lending rate by the credit rating of MSMEs.
- New and existing MSME units are suitable for this scheme.
- The MSMEs that are already running, they should have a satisfying track history of past performance and healthy financial position
- Existing MSMEs that are not an insolvent to institutions or banks are eligible to apply for it
- The units should have a least credit rating of investment grade or its equivalent according to the in-house credit rating model.
- Under this scheme, all sustainable development projects like renewable energy projects, Bureau of Energy Efficiency (BEE) star rating, green microfinance, green buildings, and eco-friendly labelling are covered, and MSMEs related to these fields are eligible.
- Business having any kind of potential CP investments including waste management can get support from it.
- OEMs which produce products related to energy efficient, cleaner production, green machinery, equipment are suitable. But either the OEM should be an MSME or it should be providing its products to a large number of MSMEs
- Sustainable Finance Scheme provides assistance and provides term loan or working capital to the ESCOs that implement EE, CP, and Renewable Energy Project. But to be eligible for this grant, the ESCO should be an MSME or otherwise the unit to which it delivers its offerings has to be an MSME.
Objective of the Sustainable Finance Scheme
The scheme aims to assist the whole value chain of energy efficiency, sustainable development projects and cleaner production that lead to significant improvements in EE, CP sustainable development in the MSMEs and which are presently not covered under the existing sustainable financing lines of credits.