The Hindu Business Line : SIDBI to help Ludhiana’s steel forging units adopt cleaner technologies

Lending support: Mr R.M. Malla (right), Chairman and Managing Director, SIDBI, with Mr Charles Cormier, Team leader, Environment and Water Resources, World Bank, at a press conference in the Capital on Monday.

Our Bureau

New Delhi, Nov 19 Small Industries Development Bank of India (SIDBI) on Monday signed an agreement with a SPV floated by SME units in Ludhiana’s steel forging sector to provide financial assistance so that they can embrace more environment-friendly technologies.

The World Bank has given its backing to this initiative by agreeing to purchase 9.90 lakh certified emission reduction (CER) units from the SPV. The bank is also helping the SPV in development and implementation of the clean development mechanism (CDM) project. Around 300 SMEs are expected to benefit from the project.

According to a press release, SIDBI signed a memorandum of understanding (MoU) with Ludhiana Hand Tools and Forging Envirocare Pvt Ltd, which is the special purpose vehicle (SPV) floated by SME units in Ludhiana’s steel forging cluster.

Special pruporse vehicle

As per the MoU, SIDBI will collaborate with the SPV to provide financial assistance to SMEs participating in the CDM project being implemented at the steel forging cluster in Punjab.

Energy saving initiatives

The SIDBI-Ludhiana SPV combine will encourage SMEs to take up energy saving initiatives. Energy thus saved would reduce carbon dioxide emissions and result in accrual of CER units. This would make SMEs eligible for carbon credit revenues through sale of CERs. The SPV’s role would be to bundle the CER accruals and provide other services to the units.

SIDBI is implementing a project for SME Financing and Development (SMEFDP) with the support of DFID, UK , the World Bank and KfW, Germany. SMEFDP is in dialogue with the SPV to structure a suitable proposal for providing technical assistance to the SPV.

The MoU was signed in the presence of Mr R.M. Malla, Chairman and Managing Director, SIDBI, and Mr Charles Cormier, Team Leader, Energy and Environment, South Asia Region, World Bank. Mr S.C. Ralhan, President of the SPV, said “We are thankful to SIDBI and the World Bank for supporting SMEs for this project.”

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