SIDBI : Financing End to End Energy Efficiency Investments in MSMEs (4E Financing Scheme)

SIDBI : Financing End to End Energy Efficiency Investments in MSMEs (4E Financing Scheme)

Objective:

  • For implementing Energy Efficiency measures on an end to end basis. For meeting part cost of (i) capital expenditure including for purchase of equipment/ machinery, installation, civil works, commissioning, etc. for implementing the Energy Efficiency measures as recommended in the DPR, (ii) any other related expenditure required by the unit, provided it is not more than 50% of (i).

  • Financing of second hand machinery/equipment; purchase of land and construction of building (except minor civil works) shall not be taken up under the scheme.

Eligibility Borrower:

  • MSME units in the manufacturing or services sector.

  • Applicant unit should be in operation for atleast three years and should have earned cash profit in the last two years of operation and should not be in default to any bank/FI.

  • Minimum credit rating of SME4/SER4/CR5 or its equivalent.

  • The unit should have undergone the process of Detailed Energy Audit (DEA) through a technical agency / consultants having BEE certified Energy Auditors. Further, the Detailed Project Report (DPR) prepared by the technical agency / consultant should have been vetted by EEC, SIDBI.

  • The unit should not have availed Performance Linked Grant under the WB-GEF Project for the proposed EE Project.

  • The unit should be in compliance with the Environment & Social Management Framework (refer Appendix I, II & III for details).

Loan Amount and Tenure:

  • Upto 90% of the Project cost with minimum loan amount of ` 10 lakh and maximum loan amount not to exceed ` 150 lakh per eligible borrower under this scheme.

  • Eligible loan amount should not exceed one-fifth of the total turn-over of the applicant unit.

  • The repayment period including initial moratorium period of upto 6 months, shall not be more than 36 months for loans upto ` 100 lakh and 60 months for loans beyond ` 100 lakh.

Promoter’s Contribution:

  • Minimum promoter’s contribution of 10% of the project cost.

Interest Rate:

  • 2.5% below the normal lending rate as per the credit rating (both fixed and floating options shall be available)

Security:

  • Hypothecation of assets created under the project including those belonging to the enterprise and not been charged to any other lender.

  • Collateral security, where-ever necessary for adequate asset coverage.

  • CGTMSE cover may be taken, if available.

Appraisal & Sanction related :

  • After the Detailed Energy Audit, the prospective borrower shall submit the Detailed Project Report (DPR) to SIDBI for its vetting by EEC. If required the sample format of the DPR shall be made available by EEC.

  • The Borrower shall submit application to SIDBI BOs along-with a copy of the DPR vetted by EEC.

  • Eligible amount of capital subsidy under CLCSS, TEQUP, etc. shall also be sanctioned along with the loan as per prevalent guidelines.

  • Disbursement shall be made after compliance of terms & conditions of the sanction stipulated in the LoI and documentation as per the extant guidelines for DCS.

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