The Hindu Business Line : DEG earmarks euro 50 m to assist SMEs for carbon trading

DEUTSCHE Investitions-und Entwicklungsgesellschaft GmbH (DEG), one of Europe's largest development financial institutions, and a member of the euro 3.29-billion KfW Bankengruppe of Germany, has earmarked euro 50 million for financing (both equity and debt) of SMEs in India this year, particularly in areas such as small hydel power units, energy systems - wind power and solar lighting systems - agro industries and infrastructure projects.

The company, through its parent KfW, has also set up a euro 100-million carbon credit fund at its office in Cologne, and is ready to assist small and medium companies in India go through the complicated process of carbon credit certification (for eventual trading in the international market) through CDM projects approved by host governments.

The company's exposure to projects in India so far has been worth euro 250 million.

Talking to newspersons here on DEG's plans and prospects in Asia/Oceania (where the company has the highest commitment of 38 per cent of its funds), with special focus on India, Dr Winfried Polte, Chairman of DEG, said the carbon trading market internationally was not yet fully developed, and DEG's thrust now was on the process of UNFCC certification, especially assistance to environmentally conscious small and medium companies.

Mr Polte said DEG was mostly into long-term financing, including equity participation with a minority stake, guarantee schemes and mezzanine finance (between equity and debt). On the India ventures, Dr Polte said DEG has a long-term association (since 1995) with Srei Infrastructure Finance through equity participation. He said DEG invested in profitable projects that contributed to sustainable development in all sectors of the economy, from agri-business to infrastructure and manufacturing to services.

"We also focus on development of the financial sector through tailor-made products in order to facilitate reliable access to capital locally."

The company, he pointed out, was keen to work on public-private partnership projects in India.

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