Bureau of Energy Efficiency signs MoU with SIDBI to finance green MSMEs | The Financial Express

Bureau of Energy Efficiency signs MoU with SIDBI to finance green MSMEs

Sustainability for MSMEs: The MoU will aim to promote energy efficiency financing for MSMEs and explore the internet of things (IoT)-based solutions, greening MSMEs, capacity building of various stakeholders, etc., BEE said.

Bureau of Energy Efficiency signs MoU with SIDBI to finance green MSMEs
As per India’s updated Nationally Determined Contribution (NDC) with respect to the UN’s Framework Convention on Climate Change (UNFCCC), India has to reduce the emissions intensity of its GDP by 45 per cent by 2030.

Sustainability for MSMEs: The government body for energy efficiency Bureau of Energy Efficiency (BEE) under the Ministry of Power has signed a memorandum of understanding (MoU) with the Small Industries Development Bank of India (SIDBI) for MSMEs. The MoU will aim to promote energy efficiency financing for MSMEs and explore the internet of things (IoT)-based solutions, greening MSMEs, capacity building of various stakeholders, etc., BEE said. 

The announcement comes weeks after SIDBI announced partnerships with multiple stakeholders to help MSMEs become more energy efficient in their operations to support India’s Sustainable Development Goals (SDG) 2030 targets. SIDBI had signed MoUs with German development agency Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH for operating a Risk Sharing Facility (RSF) that provides credit guarantees to loans from commercial banks or non-banking financial companies (NBFCs). 

Two other MoUs were signed with the Technology Information, Forecasting and Assessment Council (TIFAC) under the Department of Science and Technology and CII to identify and promote scalable green and clean technologies by MSMEs. 

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Meanwhile, BEE and MSME ministry jointly runs a collaborative platform Sameeksha (Small and Medium Enterprises Energy Efficiency Knowledge Sharing) to pool the knowledge and synergise the efforts of various organisations for the promotion and adoption of clean energy technologies and practices among MSMEs. 

However, MSMEs have been reluctant to put money into green financing projects due to a lack of access to funds. That’s because to kindle energy investments, businesses need substantial investments and most green finance projects have higher transaction costs and longer gestation period, for example, the cost of capital and its availability is a challenge for MSMEs in low carbon technologies, Ravindra Kumar Singh, CGM, SIDBI at an event organised by FE Aspire in July this year said. 

As per India’s updated Nationally Determined Contribution (NDC) with respect to the UN’s Framework Convention on Climate Change (UNFCCC), India has to reduce the emissions intensity of its GDP by 45 per cent by 2030, from the 2005 level and achieve about 50 per cent cumulative electric power installed capacity from non-fossil fuel-based energy resources by 2030, according to a Cabinet statement in August this year. 

Also read: UPI: P2M transactions jump 126% to new all-time high in October from year ago period

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First published on: 06-11-2022 at 13:43 IST