Although MSMEs are considered to be the backbone of many countries, including India, there are also many factors to consider in making their operations sustainable, like the promotion of energy efficiency (EE) initiatives/projects in this sector.
The Small Industries Development Bank of India (SIDBI) has launched an innovative product called “End-to-End Energy Efficiency Solutions” (4E Solutions) in line with the Government of India to combat climate change and to upscale interventions in the area of sustainable development. The 4E provides technical solutions, including walk-through audit, detailed energy audit, bankable DPR formulation, implementation support, and advisory services.
Technical support under this product is extended to MSMEs to improve their energy savings through the services of energy services companies (ESCOs) at a reasonable cost and assured quality service while the financial support can be availed through a concessional lending approach adopted under the 4E product.
A revolving fund has been created with the assistance of the World Bank (WB) Global Environment Facility (GEF) to provide loans for such energy efficiency projects, like the 4E solutions, at a concessional interest rates and soft terms. The revolving fund is constituted from GEF grant of USD5.5 million from World Bank and contribution from SIDBI. Under the scheme, the term loan of up to 90% of the project cost shall be provided to eligible SMEs. The interest rate loans under the 4E financing scheme shall be 2.5% below the normal lending rate.
SIDBI’s “End-to-End Energy Efficiency (4E) Solutions” won the 2017 ADFIAP Outstanding Development Awards, under the SME Development Category.