Small Industries Development Bank of India (SIDBI) has signed $543 million (about Rs 3,400 crore) pact with World Bank for two projects to provide debt assistance to start-ups, MSMEs and promote energy efficiency investments in the country.
"The projects will mark a new beginning in the area of MSME financing and supplement the Government’s thrust on Make in India and Zero Defect Zero Effect Programme," SIDBI said.
Set up on April 2, 1990 under an Act of the Indian Parliament (the “ SIDBI Act”, 1989), SIDBI is the principal financial institution for the promotion, financing and development of the Micro, Small and Medium Enterprise (MSME) sector and for co-ordination of the functions of the institutions engaged in similar activities.
The first agreement on MSME growth, innovation and inclusive finance project is for line of credit of $500 million to Small Industries Development Bank of India. Out of which, $150 million will be utilised to lift the early stage risk capital finance; $200 million for supporting service sector enterprises; and $150 million will be utilised for financing of manufacturing MSMEs.
The second agreement is for Partial Risk Sharing Facility for Energy Efficiency (PRSF) Project with a total outlay of $43 million. Under this pact, a guarantee fund with a corpus of $37 million will be managed by SIDBI. And $4 million will be implemented by SIDBI and $2 million to be implemented by Energy Efficiency Services.
"The objective of the project is to support the GoI’s efforts 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)," SIDBI said.