According to two senior officials aware of the development, the Small Industrial Development Bank of India (SIDBI) will sign an agreement with the Green Climate Fund in mid-May to support small businesses in adopting low-emission and climate-rich technologies.
Officials said the bank will inject $800 million, with a large portion of it going to be raised to build a $1 billion fund, including funding provided by the existing Global Climate Fund (GCF) for the project. “We are working to sign an agreement with the Green Climate Fund in mid-May this year. Once the agreement is reached, spending will begin to be implemented.”
Micro, Small and Medium Enterprises (MSME), Economic Survey 2024-25 estimated to contribute about 30% India’s GDP is a large amount of greenhouse gases and is susceptible to extreme weather events. They often face problems such as lack of affordable finance and limited technical knowledge, which limits their adoption of low emissions and climate resilience practices. At that time, the International Energy Agency estimated that India’s energy consumption would increase by 50% by 2030.
Sidbi intends to address these barriers with a low-interest MSME loan, which will be paid through small financial banks and non-bank financial services companies. The loan will target mitigation investments in energy-intensive clusters in the MSMES sector.
Overall, the program will benefit about 65,000 MSMEs nationwide and provide them with preferential loans to promote low-emission, climate-rich technologies, according to officials cited earlier.
In July 2024, the GCF approved USD 215.6 million to implement the Mitigation and Adaptation Project (FMAP) for the MSMES in India. The funding includes $200 million, provided at a discount rate, while the remaining $15.6 million is supported by grants. The plan is expected to reduce greenhouse gas emissions by 35.3 million tons.
The GCF is a multilateral financing entity established in 2010 by the United Nations Framework Convention on Climate Change to support developing countries in mitigation and adaptation to climate change.
“The (SIDBI-GFC) project will be implemented after payments begin,” said a senior official from the Ministry of Environment, Forests and Climate Change. “This is not only a boon for MSME, but it will also help reduce emissions and increase emissions,” said a senior official from the Ministry of Environment, Forests and Climate Change. [the sector’s] The contribution of GDP. ”
