Green Finance

Green Finance

Green Finance is any market-based investing or lending program that factors environmental impact into risk assessment, or utilizes environmental incentives to drive business decisions. In India, SIDBI has taken several initiatives to promote lending for green and energy efficient technologies in MSME sector. SIDBI has been operating focused lending schemes for promoting investment in clean production and energy efficient technologies / production process under bilateral Lines of credit from KfW, Germany and JICA, Japan. These focused schemes have two pronged approach, i.e. concessional lending to encourage investment in green or energy efficient technologies and launching of cluster specific information dissemination

To read on SIDBI’s role in Green Financing and Development, click here.

SIDBI’s Financing Scheme for Energy Saving

The Japan International Cooperation Agency (JICA) has extended a Line of Credit to SIDBI for financing Energy Saving Projects in MSMEs. Under this scheme, financial assistance is provided to MSMEs through SIDBI as well as through refinance to banks/ SFCs and NBFCs to encourage MSME units to undertake energy saving investments in plant & machinery/ production process to reduce energy consumption, enhance energy efficiency, reduce carbon-dioxide emissions and improve profitability in the long run. The interest rates are attractive.

To get more details on the scheme, click here.

To access the list of Energy Saving Equipments eligible under this scheme, click here.


IDBI Bank’s Environmental Services

IDBI bank has undertaken the pioneering role in the Indian banking sector in the area of environmental banking and has been active in this area for over 17 years.

IDBI Bank has created an exclusive group working on climate change and more specifically on carbon credits advisory services to the clients to deal with Clean Development Mechanism (CDM) / Carbon Credits of Kyoto Protocol and Voluntary Emission Reductions (VERs) authorities.

This group has devised a structured product for providing upfront finance against the carbon credit receivables. The product is well accepted by the Indian project developers.

The carbon credit group is closely associated with the World Bank in providing an End–To–End solution for the chiller users of India in switching over from a high carbon chiller to energy efficient low carbon chiller. Click here for the details of this programme

IDBI Bank also publishes a monthly newsletter called "IDBI Carbon Developments". The magazine covers the analysis of the pricing of European Union Allowances (EUAs), Certified Emission Reductions (CERs), progress in CDM project registration and various other developments happening in the carbon market.

Other Banks’ Schemes for Energy Savings for SMEs