Energy Efficiency Financing in MSMEs

1. Energy Efficiency Financing in MSMEs ENERGY MISUSED CAN NOT BE EXCUSED GO GREEN WITH SIDBI GO GREEN WITH SIDBI AND GIZ 1

2. SIDBI – towards sustainable financing About SIDBI • 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 CONSERVATION - DOES NOT COST IT SAVES GO GREEN WITH SIDBI 2

3. 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. CONSERE TO PRESERVE ENERGY MISUSED CAN NOT BE EXCUSED 3 3

4. 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 CONSERE TO PRESERVE

5. 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 WITH SIDBI CONSERE TO PRESERVE 5

6. 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 GREEN WITH SIDBI DON’T BE FUELISH GO GREEN WITH SIDBI

7. 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 to-energy 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 GO GREEN WITH SIDBI SAVE ENERGY - SAVE MONEY GO GREEN WITH SIDBI

8. SIDBI’s Integrated Approach Finance Development Ministry of MSME subsidy - TEQUP WB-GEF Project Sustainability HUB JICA, Japan- EE LoC KFW, Germany EE/CP TA GIZ, Germany – EE TA KFW, Germany- EE/CP LoCs JICA, Japan EE TA World Bank LoCs on E&S UNIDO, IFC & EU LETS GO GREEN TO GET OUR GLOBAL CLEAN 8

9. 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 SAVE ENERGY - SAVE MONEY GO GREEN WITH SIDBI GO GREEN WITH SIDBI AND GIZ 9

10. Scheme for Financing projects in MSME Sector REDUCE – RECYCLE - REUSE GO GREEN WITH SIDBI 10 10 10 GO GREEN WITH SIDBI AND GIZ

11. 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. THING THAT BURN NEVER RETURN GO GREEN WITH SIDBI GO GREEN WITH SIDBI AND GIZ 11

12. 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 TIME TO REALIZE – BE POWER WISE 12

13. 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 YOU 13

14. 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. CONSERVE ENERGY ACHIEVE SYNERGY 14

15. Save today. Survive tomorrow Thank You Please Visit: www.sidbi.in giz-indien@giz.de LESS YOU BURN – MORE YOU EARN CUT EMISSIONS TO SAVE MOTHER EARTH 15 15