Enigin Update - New Indian Energy Efficiency Loan Fund
INDIAN financial services provider Tata Capital, aims to issue Rs 7,000 — 8,000 crore ($1.43-$1.8 billion) for energy efficiency financing over the next five years, a company official said yesterday.
A Memorandum of Understanding (MoU) was signed by Tata Capital with the Indian Bureau of Energy Efficiency (BEE) to put in place energy efficiency funding, including funding for energy service companies that work on energy efficiency and energy saving.
This funding is welcome, but is still a drop in the ocean as the energy efficiency market in India is estimated to be worth Rs 74,000 crore ($15 billion).
Under the MoU Tata Capital will work closely with BEE on the Energy Efficiency Financing Platform (EEFP) with the aim to create the mechanism to enable mainstream financing of energy efficiency projects. The EEFP will come under the National Mission for Enhanced Energy Efficiency.
BEE Director General Ajay Mathur said, "Along with Tata Capital, BEE will be able to carry out collaborative activities to bring in more money for energy efficiency projects.
"Tata Capital's concerted focus on this area is a positive signal to market and private investors," he noted.
BEE and Tata Capital agree that in India conventional funding organisations do not readily fund energy efficiency projects, hence they are looking to fill the void, with funding that provides a payback period of no more than 4-5 years.
Praveen Kadle, MD and CEO, Tata Capital said regarding the new funding: “We plan to disburse Rs 3,000 crore in the fifth year. So overall, we may end up disbursing Rs 7,000-8,000 crore over the five-year period.
“This agreement will bring together the technical know-how and experience of BEE and financial expertise of Tata Capital to help promote energy-efficient projects and environment-friendly technologies across the country.
“This also follows up on our Tata Cleantech initiative that is focused on offering financing and advisory to companies involved in clean technology.”
Enigin Distributors in India will be able to monitor this funding for their clients and maybe themselves as they build their own energy saving businesses with technology and solutions from Enigin.
Picture of India Gate, New Delhi by ZeePack reproduced under CCL.
