The pact is the latest endeavor in YES BANK’s continuing commitment towards financing and promoting clean energy projects.
The PRSF has been sponsored by the World Bank with the support of Global Environment Facility (GEF) and Clean Technology Fund (CTF). As the Project Execution Agency, SIDBI will extend the guarantee for securing up to 75% of the loan amount up to INR 15 Crores extended by YES BANK to the MSMEs under this program. YES BANK is the first bank to be empanelled as a participating financial institution (PFI) under this facility.
The facility is expected to provide credit guarantee to more than 500 Energy Service Company (ESCO) implemented Energy Efficiency projects, which would mobilize financing of the tune of USD 127 million. Further, the project is also expected to result into significant energy savings of the tune of 1,002.1 Gwh and CO2 emissions reductions of the tune of 0.734 million tons.
The objective of the project is to transform the energy efficiency (EE) market in India by promoting increased level of EE investments, particularly through energy service performance contracting (ESPC) delivered through Energy Service Companies (ESCOs). The successful completion such projects, through PRSF support, is expected to reduce the risk commercial banks face in providing credit to the stakeholders; it will also showcase the viability of ESPC market for scaling up implementation of energy efficiency projects in Micro, Small and Medium Enterprises (MSMEs), large industries, municipalities, and buildings sector in India.
Sumit Gupta, Group President, Retail Banking Assets Group, YES BANK, said, “Financing of Energy Efficiency Projects is still at a nascent stage in India. YES BANK is privileged to be the first bank to sign up with SIDBI for the prestigious facility. We are confident that this project will be instrumental in transforming the energy efficiency landscape in India. Since inception, YES BANK has followed a Responsible Banking ethos and taken the lead in financing green and renewable energy projects, and this partnership is another endeavor in this direction.”
Ramesh Dharmaji, Chief General Manager, SIDBI emphasized the role of SIDBI in improving Energy Efficiency in MSMEs through innovative financial mechanisms in the past and added that the current association with YES BANK is a step in this direction.
He emphasized the need of such Risk Financing by banks for developing Energy Efficiency Market by Energy Service Companies. He mentioned that this fund is unique and first of its kind in the country and that it has commenced operation at the right time in view of the larger goals of achieving GHG Emission Reduction through Energy Efficiency and India’s commitment towards this objective.
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