The World Bank is working with the Ministry of Micro, Small & Medium Enterprises, to bring in a credit guarantee mechanism catering to lending to MSMEs who would like to reduce their energy expenses in the long term by investing in rooftop solar
Union Minister of Micro, Small and Medium Enterprises (MSME) and the Minister for Road Transport & Highways Nitin Gadkari has invited MSMEs to avail concessional debt finance to install rooftop solar for business efficiency. Rooftop Solar, he said, offers an excellent value proposition to MSMEs by significantly bringing down cost of electricity consumption, which on an average, is up to one-fifth of their operations cost.
“I believe there is a strong business case for MSMEs to install rooftop solar and achieve significant savings to achieve the cost-competitiveness. I am confident that MSMEs will stand together in generating and consuming solar power using their rooftops,” said Gadkari.
In 2016, The World Bank had launched the ‘Solar Rooftop Financing Program’ being implemented by the State Bank of India (SBI).With a view to addressing the issues on the debt side and to give a fillip to the sector, SBI has availed a $625 million line of credit from World Bank specifically, for financing RTS projects across the country through its identified branches. A countrywide customized financial product has been developed by SBI which covers 75 per cent of the project financing requirement along with other favourable terms such as repayment period, moratorium, and security.
“A large amount (average INR 8 and higher per unit) is being paid by the MSMEs for power consumption, which contributes to up to one fifth of the overall production costs. To assist MSMEs in implementing rooftop solar projects, the Ministry is working with the World Bank on a credit guarantee program to make financing accessible to unrated MSMEs. Considering the rates of solar power from large utility power plants have come down to a record INR 1.99/kWh, MSMEs must leverage this opportunity to bring down their energy expenses,” added Gadkari.
“The World Bank is committed to the cause of MSMEs and an investment in this industry will aid India’s aim to become ‘Atmanirbhar’ or ‘self-reliant’. By facilitating MSMEs to decarbonise their power consumption in a sustainable manner, India can achieve a twin objective of greening the economy and uplifting MSMEs to become highly competitive by reducing its power costs,” noted Junaid Ahmad, Country Director India, World Bank.
The World Bank is working with the Ministry of Micro, Small & Medium Enterprises, to bring in a credit guarantee mechanism catering to lending to MSMEs who would like to reduce their energy expenses in the long term by investing in rooftop solar.