The Hindu Business Line : SIDBI to help small units generate revenues thru carbon credits

New Delhi, May 11 The Small Industries Development Bank of India (SIDBI) would invest Rs 500-600 crore over the next two years to enable the small and the medium enterprises (SMEs) generate revenues through carbon credits. The move would help European companies to buy more carbon credits from India, where currently the market is very fragmented and the volumes are small. However, China, with its large scale projects, is able to generate Certified Emission Reduction (CERs) in higher volumes, making it the most attractive market in the world to buy carbon credits. India is the second largest market.

SIBDI would support the forgings, brick kilns, food processing, foundaries and ceramic SME clusters across different parts of the country to reduce their power consumption and bring technological changes that would help them earn carbon revenues.

“SMEs lack the technological know-how and funds that could help them generate CERs. Moreover, due to their small size, they are not able to generate CERs in volumes that could help them fetch a good price. So we plan to fund 5-6 industry clusters in the next one-two years through which we could aggregate the carbon credits generated in these zones and help the companies sell them in the European market,” Mr V.S. Rathore, SIDBI Chief General Manager, told Business Line.

He explained that the model would be similar to the Ludhiana cluster where SIDBI, in partnership with the World Bank, is facilitating the small enterprises to implement projects that would qualify them to garner carbon credit revenues. The project has SIDBI as the funding and the technology consulting partner and World Bank as the assessment agency to ensure that the projects are able to receive CERs. The World Bank would procure 1 million CERs from these units.

SIDBI, with the technological assistance of the UK-based Department for International Development, would also be implementing 17 projects in cities such as Rajkot, Mohali and Coimbatore over the coming months, which could further expand the scope for micro enterprises in generating CERs, added Mr Rathore.

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