OECD-CEFIM-BEE Energy Efficiency Platform and Protocols webinar, 15 July 2021

1. Financing Energy
Efficiency in MSMEs
Rajiv Kumar
General Manager

2. SIDBI: Background
2
• Set up by an Act of Parliament in April 1990.
• Development Finance Institution (DFI)
Mandate
Promotion, financing and development of MSMEs and to co-
ordinate the functions of institutions serving the sector.
Small Industries Development Bank of
India (SIDBI)

3.  63 Million MSMEs
 Employment - 111 Mn people
 2nd largest employer after
agriculture.
Value addition to economy:
 45% of total manufacturing output,
 30% contribution to GDP,
 >8000 products manufactured,
 40% of total exports.
MSMEs – Backbone of Indian Economy
o High operational inefficiency
o Technology obsolescence
o Resource intensive
o Low profit margins
o Low technical capabilities
o Lack of awareness amongst
MSMEs
MSMEs consume ~25% of total
industrial energy consumption.

4. Typical Indian MSMEs
Dusty filters
Improper fuel
storage Open heating
Improper refractory Improper Insulation Incomplete
combustion
Savings potential of upto 30% in energy & resources costs

5. SIDBI’s initiatives for Sustainable Development in MSMEs
• Introduced schemes for financing Energy Efficiency (EE) & Cleaner Production
projects in MSME sector.
• Entered into strategic partnership with BEE, TIFAC, The World Bank, DFID, JICA, KfW,
GIZ & AFD for promoting & financing clean & EE investments in MSME sector.
• Created a dedicated team of experts housed at “Energy Efficiency Centre (now called
Green Climate & Sustainable Development Initiatives)” for focused approach.
• Conducted awareness campaigns, focused group meetings, energy audits, pilot
interventions in MSME clusters.

6. Journey so far – Work in Progress
Green Climate
Fund
2021
Guarantee
Mechanism
Partial Risk Sharing
Facility (PRSF)
2015
Revolving Fund
[End to End
Energy Efficiency
(4E) scheme]
2014
Credit+ approach
Technology advisory
(Financing Energy
Efficiency at MSME
project supported
by WB-GEF)
2010
Lines of Credit
on EE/CP –
(JICA, AFD, KFW
etc.)
2005

7. End to End Energy Efficiency (4E) Financing Scheme
TECHNICAL SUPPORT
Detailed Energy Audit
Preparation of DPR
Implementation
Support
FINANCIAL SUPPORT
Loans from Rs. 10 Lakh to Rs.
150 Lakh
Up to 90% of total project cost
Concession in interest rate –
1.7% to 3.5%
Project Coverage
- EE retrofit projects
- Expansion projects
- RE projects (however RE component
alone is not allowed)

8. Highlights of Achievements
 No. of MSMEs & ESCOs : 7000+
 EE/RECP Loans : INR 65 billion (~ $ 1 billion)
 Electricity Saved : ~ 1043 Mn units annually
 Thermal energy saved : ~ 650,000 Mn kCal annually
 Emission Reduction : ~ 1 million t CO2 eq. annually
 Guarantees to 35 sub-projects with guaranteed amount of USD 22.06
million (INR 1,433.20 million), leveraging a total EE Investment of 2.95
times i.e. USD 64.99 million (INR 4,225.50 million).
Financial Support
 Energy Audits & DPRs : 1600+
 Implementation of EE projects : 900+
 Results verified in 637 MSMEs through third party M&V.
 Identified direct EE investments : INR 3322 million
 Estd. Emission Reduction : 2.72 million tCO2
 Training :
 1500+ personnel from 75 FIs and
 750+ energy audit professionals & ESCOs
Developmental support

9. Key Learnings
Concessional
Finance
Technical
Support
End to End
handholding
RECP
Developing
Ecosystem
Scaling up

10. 10
Thankyou
Rajiv Kumar
General Manager
Mob.9711441998
E-mail id – rajivkr@sidbi.in