Green Financing
SIDBI has adopted a three-pronged approach, firstly, providing concessional financial assistance through dedicated Green Finance Schemes for mitigation and adaptation projects in MSME sector. Secondly, supporting various development activities leading to an enhanced awareness and creation of an ecosystem to facilitate the adoption of climate resilient measures by MSMEs. Thirdly, to encourage other Banks/FIs to finance Energy Efficiency projects through training, hand holding and Risk Sharing Facility support.
To increase the resilience of MSME sector to combat the climate change and with a view to facilitate greening of MSMEs in line with the country’s commitments at Conference of Parties (COP26) at Glasgow.
Support Policy push made in the Union Budget 2022 for climate action, clean energy, solar, e-mobility, battery, waste management, energy efficiency through Energy Service Companies (ESCOs).
Green - Thrust
& Priorities
During the year, SIDBI’s initiatives were -
Green Financing Products
Launched “Green Finance Scheme” which covers sectors such as Renewable, Transport, Waste, Energy, Mobility etc., with adoption of Environment, Social, Governance (ESG) parameters. The existing schemes such as End to End Energy Efficiency (4E) financing scheme and TIFAC-SIDBI (Srijan) programme etc., have been revisited and simplified. Achieved 168% growth in outstanding of green loans during FY 2022.
Partial Risk Sharing Facility for Energy Efficiency project
Promoting energy efficiency projects implemented through Energy Service Companies (ESCOs). The facility provides Risk Sharing Facility for Energy Efficiency Projects assisted by the Participating Financial Institutions (PFIs). As on date, 13 Banks / NBFCs including SBI, BOB, Canara Bank, HDFC Bank, IREDA etc. have been empanelled as PFIs. Till FY 2022, 45 EE projects have been supported under the facility aggregating to a total project cost of ₹476.44 crore with a loan amount of ₹231 crore and guaranteed amount of ₹173.31 crore.
Cluster level intervention across India
Handholding support to 100 MSME clusters for adopting green and clean initiatives. In the long term, this will lead to significant reduction in energy consumption and Green House Gas (GHG) emission and resource consumption. This will support self- reliant and make in India initiative of GoI. During FY, activities have been initiated in the MSME clusters of Bihar and West Bengal targeting around 10,000 MSMEs.
Carbon Neutrality for SIDBI
SIDBI, in line with the announcement made at COP26 has decided to reduce its carbon footprint in a phased manner and eventually become carbon neutral by 2024 and net zero as next step. The initiative is expected to motivate other similar FIs and stakeholders.
Green Climate Fund (GCF)
SIDBI is working on potential projects and programs for submission to GCF. Ministry of Environment Forest and Climate Change (National Designated Authority of India) has given in-principle approval for the three projects aggregating around USD 1,250 Mn.
International Co-operations
SIDBI has revamped tie-ups with international partners and cooperation with AFD, ADB, KfW, GIZ, The World Bank, The Montreal Group, IDFC etc., SIDBI in partnership with AFD and Shakti has launched Green Indian Financial System (GIFS) Initiative which seeks to facilitate such dialogues and discussions on greening the Indian financial system. Discussions with GIZ and the World Bank country team are in progress for establishing the Risk Sharing facilities on Municipal Solid Waste and Compressed Bio-Gas respectively.
SIDBI shall continue to play the leadership role in encouraging such high impact climate change projects by providing debt funding as well as other support.
Infrastructure Development -SIDBI Cluster Development Initiatives
