Promoting EE in MSME Cluster

Energy Efficiency Financing in MSMEs
1
GO GO
GREEN
WITH SIDBI
AND GIZ
GREEN
WITH
SIDBI
ENERGY
MISUSED
CAN
NOT
BE EXCUSED
SIDBI – towards
sustainable
About
SIDBI financing
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 Indirect
Term loan and WC
Bill Finance
Risk Capital- Equity, subdebt
Venture capital
Govt subsidy schemes
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GO GREEN
WITH
CONSERVATION
- DOES
NOTSIDBI
COST IT SAVES
An overview of India’s Enery Scenario
vis a vis MSMEs





MSME sector consumes almost half of the total
energy consumption by industrial sector.
Many MSMEs are highly energy inefficient.
Energy cost, as also profits constitute 5% of
total sales.
Scope to reduce energy uses almost 25%
Thus, EE can increase profit by 25%.
To fill the gap in demand and to support the
country’s growing economy there is a need for
increased investment in Renewable Energy (RE)
sector/technologies by MSMEs also.
3
GO
GREEN TO
WITH
SIDBI
ENERGY
CONSERE
MISUSED
CAN
PRESERVE
NOT
BE EXCUSED
SIDBI
• Recognising this SIDBI has taken various
initiatives for EE in MSMES
– Specialised vertical for EE/CP financing to
operate EE/CP schemes and support for
MSMEs
GO
GREEN TO
WITH
SIDBI
CONSERE
PRESERVE
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
GO
GREEN TO
WITH
SIDBI
CONSERE
PRESERVE
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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
GREENBE
WITH
SIDBI
DON’T
FUELISH
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 toenergy
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 crore
Solar Photovoltaic
: 5 projects for Rs. 39 crore
Through IREDA
: 25 projects for Rs.200 crore
GOENERGY
GREEN WITH
SIDBI
SAVE
- SAVE
MONEY
SIDBI’s Integrated Approach
Finance
Development
Ministry of MSME subsidy
- TEQUP
WB-GEF Project
Sustainability
JICA, Japan- EE LoC
KFW, GermanyEE/CP LoCs
HUB
KFW, Germany
EE/CP TA
GIZ, Germany – EE TA
JICA, Japan
EE TA
World Bank LoCs on E&S
UNIDO, IFC & EU
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LETS GOGO
GREEN
TO GET
OUR
GLOBAL CLEAN
GREEN
WITH
SIDBI
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
WITHWITH
SIDBI AND
GIZ
GO
GREEN
SIDBI
SAVE
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.
2.
3.
Any other incentive
New / Existing MSME unit
Have a satisfactory track record of past performance and sound
financial position; and
Score above the minimum investment grade raring as per SIDBI’s
Extant Loan Policy
TEQUP/CLCSS/TUFS or any other Government Scheme benefit shall be
available, if eligible.
GOGREEN
GREEN
WITH
GO
SIDBI
AND SIDBI
GIZ- REUSE
REDUCE
–WITH
RECYCLE
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SIDBI’s Loan Sanctioning Procedure under EE & 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.
11
GO GREEN
WITH SIDBIWITH
AND GIZ SIDBI
GO
GREEN
THING
THAT
BURN
NEVER RETURN
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
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GOREALIZE
GREEN WITH
TIME TO
– BE SIDBI
POWER WISE
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
GO GREEN
WITH
SIDBIYOU
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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.
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CONSERVE
ACHIEVE
We ENERGY
Empower
MSME SYNERGY
Thank You
Please Visit:
www.sidbi.in
[email protected]
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CUTYOU
EMISSIONS
TOWITH
MOTHER
EARTH
LESS
BURN
–SAVE
MORE
YOU
EARN
GO GREEN
SIDBI