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Concessional Loan Scheme  with Mechanism for Scale-up using “Energy Saving Equipment List". BEE-UNIDO workshop on “Financing of Energy Efficiency and Renewable Energy for SMEs” Nov.8-19 th , 2009. Keiji KATAI Representative Japan International Cooperation Agency (JICA)

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concessional loan scheme with mechanism for scale up using energy saving equipment list

Concessional Loan Scheme with Mechanism for Scale-up using “Energy Saving Equipment List"

BEE-UNIDO workshop on

“Financing of Energy Efficiency and Renewable Energy for SMEs”

Nov.8-19th , 2009

Keiji KATAI

Representative

Japan International Cooperation Agency (JICA)

Katai.Keiji@jica.go.jp

slide2

Grant Aid

New

JICA

Grant

(※)

MOFA

Technical Assistance

bilateral assistance

ODA

JICA

October, 2008 -

Yen loans

JBIC

multilateral assistance

international authority

1. “JICA”: The World’s Largest Bilateral Aid Agency

US$ 10,280 million

(FY2008 Budget Estimate)

(※) A part of grant assistances will be provided by MOFA

and the rest of the financial assistances will be shifted to JICA.

2

slide3

“JICA”: Focus in India

Transportation

Employment

Energy & Climate Change

Economic

Growth

Basic Social Service

Inclusive Growth

Faster Growth

India

Environmental

Improvement

Poverty

Reduction

Rural Livelihood

Urban Environment

Natural Environment

3

jica s initiatives oda loans more than 50 years in india
JICA’s Initiatives~ODA Loans more than 50 years in India~

Aggregate Committed Amount (upto 2007):

Electric Power & Gas: 1,021 billion JPY

Transportation: 442 billion JPY

Water Supply, Sewerage and Sanitation: 343 billion JPY

Forestry: 169 billion JPY

→2,437 billion JPY (approximately US$ 24 million)

Annual Commitment: USD 2 ~2.5 billion / year

4

slide5

2. MSME Energy Saving Project

Consultant

Technical Assistance

GoI

guarantee

E/S Project

(MSME)

Clusters

Consultant

Sub-Loan

E/S Project

(MSME)

9.5-10%

E/S Project

(MSME)

Concessional Loan

PLIs/NBFCs

Sub-Loan

Sub-Loan

PLIs/NBFCs

E/S Project

(MSME)

(SIDBI= Small Industries Development Bank of India)

5

finance scheme catalyst
Finance Scheme - Catalyst
  • JPY 30 billion / Approximately INR 1500 Cr
  • Financial Parameter
    • Interest Rate: 9.5 – 10.0% p.a. to end user
    • Minimum Borrower Contribution:

25%(Existing) / 33% (New Company)

  • Eligible Borrower: Small & Medium Enterprise

in any industry at anywhere in India

  • Eligible Investment: Those items in the Energy Saving Equipment List

JPN’s Experience

6

3 major obstacle for energy saving investment procedure for loan sanction
3. Major obstacle for energy saving investment – Procedure for Loan Sanction
  • Financial Institutes (Branch Officers)
    • Technically not equipped with reviewing individual energy saving investment
    • Time consuming process is not preferred
  • MSMEs
    • Busy with day-to-day operation
    • Not aware of detailed energy saving potential
    • Difficult to prepare Project Report for energy saving investment from “technical” and “time” constraints
    • Detailed Information sharing with other Units is not easy - competition

7

jica s approach energy saving equipment list
JICA’s approach “Energy Saving Equipment List”

EASY & QUICK reference

for Lender, Borrower & Equipment Supplier

Not Fine Tuned to Individual Unit (Sub-Optimal Approach)

At least 15% of Energy Saving

Please visit website:http://jica.org.in

→ Energy Saving Equipment List

JPN’s Experience

8

activities cycle
Activities Cycle
  • One-to-one FU
  • Feedback to the List
  • Monitoring of Impact

Meeting with

Industrial Association,

SIDBI, BDS providers

  • - Financial Opportunity
  • & Tech Options
  • 11 Campaigns are
  • already carried out
  • Technical Brochure
  • to be prepared
  • - Feedback to Energy Saving
  • Equipment List

11

progress
Progress…
  • Started Dec. 2008
  • Taking place at Mumbai, Thane, Nasik, Bangalore, Hyderabad, Ludhiana, New Delhi, Tirupur, Jallandhar, Coimbatore,Rajkot, Surat, Chandigarh…

(*above are SIDBI Branch Offices)

  • Total 299.85Cr / 773 Projects are sanctioned under direct loan from SIDBI. (as of Sep. 2009)

12

4 way forward
4. Way Forward

Improve “Energy Saving Equipment List” for Specification & Bench Mark information

Expand “the List” approach to major financial institutions (currently SFC & IREDA. SBI and other FIs are under discussion)

Mechanism for continuous updating (Star Rating?)

13