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Financing mechanisms for energy efficiency improvement in SMEs Summary of day 1

Financing mechanisms for energy efficiency improvement in SMEs Summary of day 1. Dolf Gielen New Delhi, 19 November 2009. Session I: SME sector and opportunities in India Session III: Available financing mechanisms and instruments in India Session III: Discussion

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Financing mechanisms for energy efficiency improvement in SMEs Summary of day 1

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  1. Financing mechanisms for energy efficiency improvement in SMEsSummary of day 1 Dolf Gielen New Delhi, 19 November 2009

  2. Session I: SME sector and opportunities in India • Session III: Available financing mechanisms and instruments in India • Session III: Discussion • Large new BEE initiative for SMEs • 3 GEF projects: UNDP, UNIDO, World Bank • Coverage >20 clusters/target >1000 companies • Financing mechanisms combined with technical assistance: SIDBI (WB, JICA), IREDA, MSME (TEQUP) • International experience: IFC, Thailand • Indian implementation experience: TERI, SDC

  3. Finance is only one of many barriers: • Other management priorities • Lacking energy management • Lacking audit capacity • Lacking technical solutions • Conservative management (risk aversion) • Cluster level business service supply • Cluster level demonstrations • Fear of production loss • These are cluster specific, high dependence on capacity of individuals

  4. Finance barriers • Few companies have heard of support schemes • Funding of technology development/scaling • Funding demonstrations • Bankable investment projects • Quality of financial accounts • Collateral micro/small enterprises, sick units • Blueprint DPRs • Local bank involvement/knowledge/interest • High risk perception regarding efficiency projects

  5. Possible solutions • Define target group better: (M)SME, 150 or 300 or 2000 clusters, 13 million or 26 million enterprises • Adequate policy incentives: pricing, regulation etc – more coordination between ministries, federal and state governments • Better metering, energy use reporting and benchmarking • Presence in the clusters is key – build credibility • Train service providers • Fund demonstration projects • Develop sustainable regional/cluster capacity – coordinate the existing networks better • Equipment rating • Focus on productivity/quality improvement/social co-benefits • Select active partners • Consider “clusters of clusters” • Better monitoring, evaluation and reporting of activities and outcomes: combined activity coordinating committee and BEE ?

  6. Thank you for your attentiond.gielen@unido.orgwww.unido.org

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