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CONFERENCE ON FINANCING OF SUSTAINABLE LOWCARBON INDIAN ECONOMY

CONFERENCE ON FINANCING OF SUSTAINABLE LOWCARBON INDIAN ECONOMY. PRESENTATION E S Balasubramanian Consultant, World Resources Institute. MAY13, 2010. BARRIERS IN E.E IMPLEMENTATION. Lack of information on Energy efficiency measures and investments required EE equipments and supply options

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CONFERENCE ON FINANCING OF SUSTAINABLE LOWCARBON INDIAN ECONOMY

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  1. CONFERENCE ON FINANCING OF SUSTAINABLE LOWCARBON INDIAN ECONOMY PRESENTATION E S Balasubramanian Consultant, World Resources Institute MAY13, 2010

  2. BARRIERS IN E.E IMPLEMENTATION • Lack of information on • Energy efficiency measures and investments required • EE equipments and supply options • ESCOS & EE Consultants availability • Resistance to undertake Energy Audit by SME’s despite availability of incentives because of mindset/attitude of entrepreneurs

  3. BARRIERS IN E.E IMPLEMENTATION • Lack of awareness & skills of Bank staff to identify and process good EE projects – sensitisation of Bank Officers to EE required • Cost of Energy Audit and interest rates for E.E loans perceived high by SMEs • Lack of credible ESCOs to undertake ESP under shared savings/guaranteed savings model.

  4. SUGGESTED FINANCIAL INCENTIVES TO STIMULATE EE MARKET • Continue 50% grant/subsidy for Energy audit to SMEs by IREDA under World Bank programme • Government should consider capital/interest subsidy for EE projects similar to TUF. • Interest Concession by Banks/FIs up to 25bps for clean energy projects/E.E.Projects • Line of credit for financing E.E.Projects at lower interest rate (similar to JICA line of credit of SIDBI)

  5. SUGGESTED FINANCIAL INCENTIVES TO STIMULATE EE MARKET • Appraisal of EE projects on the basis of cash flow out of energy savings • Venture capital/Equity financing for ESCOs • A new loan product for financing ESCOs for undertaking Municipal street lighting / pumping EE projects. This loan can be guaranteed by IFC/CGTSI/USAID.

  6. OTHER SUGGESTIONS • Whenever power and fuel costs of a unit exceeds Rs. 50 lacs p.a, banks may advise it to undertake energy improvement program. • Sensitize Bank’s officers on EE financing schemes and identifying potential beneficiaries • An interactive seminar for Key Bank GM’s may be organised by IBA as a follow up of three country EE project • IBA may advise member banks to formulate schemes for EE financing based on the model set by five Banks.

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