Sustainable Finance Schemes
The Sustainable Finance scheme was introduced by the Small Industries Development Bank of India to provide financial assistance for the project developments and boost energy efficiency and cleaner production. Fund assistance is given in those projects that are not covered under the international lines of credit like eco-friendly labeling, construction of green buildings, green microfinancing, or in projects related to renewable energy.
The main objectives of sustainable finance schemes are:
- Be it existing or new, Small and Medium enterprises that are part of MSMED Act, 2006. all hold the eligibility to avail of funding under this scheme.
- In the case of existing MSMEs, they are considered financially stable, must have a proven track record with no defaults of financial institutions or banks.
- Funding assistance is given to those who have a minimum credit rating of investment grade according to the internal credit rating model.
- Funding is given for mini hydel power projects, energy generators, solar power plants, and biomass gasifier power plants.
- Funding is provided for MSMEs that are investing in waste management.
- Assistance is provided to OEMs that are dealing in the manufacturing of cleaner production and energy-efficient equipment. However, the OEM must be an MSME and must supply products to a sufficient number of MSMEs.
Interest Rate for Sustainable Finance Scheme
The interest rate of the Sustainable finance scheme is the same as offered by the credit ratings of MSMEs.
Sustainable Finance Scheme Eligibility Criteria
The eligibility criteria that must be met to receive assistance under the scheme are mentioned below:
- Renewable energy projects like wind energy generators, solar power plants, mini hydel power projects, biomass gasifier power plants, etc. for captive/ non-captive.
- Any potential CP investments that include waste management
- Suitable assistance to OEMs that manufactures energy-efficient/ cleaner production/ green machinery/ equipment. Either the OEM has to bean MSME, or it has to be supplying its products to a substantial number of MSMEs
- The project should not be a part of international or bilateral lines of credit.
Suitable assistance using term loan or working capital is granted to the ESCOs that implement EE/ CP/ Renewable Energy Project. To be eligible for this grant, the ESCO must be an MSME, or otherwise the unit to which it renders its services has to be an MSME.
