EIB and SBI launch € 100 million financing for climate action and sustainable development
In a significant development, the European Investment Bank (EIB) and the State Bank of India (SBI) have launched a new â¬ 100 million (~ $ 121.63 million) initiative for the climate action and sustainable finance.
The official announcement to this effect was made during the meeting of the leaders of the European Union (EU) and India in Portugal.
This is one of the EIB’s first private equity operations in India. The Neev II Fund is the result of the EIB and SBI’s commitment to support climate action and the country’s sustainable development goals.
Under the agreement, Neev Fund II will invest up to 100 million euros (~ $ 121.63 million) in small and medium enterprises (SMEs) across the country. Funding will be provided to companies offering solutions for clean energy, electric vehicles, efficient use of raw materials, and water and circular economy projects in the country.
The fund will help emerging Indian companies invest in their growth through equity and quasi-equity arrangements. Funding will target sectors that support the United Nations Sustainable Development Goals.
Commenting on the latest development, EIB Vice-President Christian Kettel Thomsen said: âClimate change kills thousands of people and damages hundreds of billions of euros every year. Innovative solutions often require innovative forms of financing, such as private equity funds. Our partnership with SBI will create an indispensable source of equity finance for climate action and environmental sustainability solutions offered by innovative SMEs. Saving our planet from climate change requires a comprehensive approach, and the EIB is proud to have found an ally at SBI ready to deploy innovative financing solutions for global climate action. “
The partnership is expected to lay the groundwork for strategic collaboration between India and Europe, strengthening climate action and environmental sustainability both in India and globally. It will also help strengthen the country’s SMEs and contribute to long-term and sustainable economic development.
Speaking in a similar vein, SBI Chair Dinesh Khara said, âSBI’s core ethics in financial inclusion and social development underpin its business activities and are reflected in its decision to invest in Neev Funds. Neev Fund II will provide equity to SMEs, focusing on climate risk mitigation, promotion of social development, job creation and gender equality on a large scale. I believe that the cooperation of the two institutions, the EIB, which is one of the largest climate donors in the world, and SBI, India’s largest financial institution, will further strengthen and deepen the bond between India and the EU. “
The investment is provided under the EIB’s Climate Action and Environment Fund, created to support projects aimed at reducing greenhouse gas emissions and supporting environmental sustainability.
In May last year, the European Commission’s Network and Innovation Executive Agency and India’s Ministry of Science and Technology launched a call for proposals to use existing local energy systems to accelerate decarbonization and reduce clean energy costs.
Earlier, the EIB had confirmed that it would increase its investments in onshore wind by expanding an existing loan program with the SBI. The EIB had also approved a line of credit with YES Bank to accelerate private investments in wind and solar energy projects.
As part of the EIB’s long-standing commitment to India’s renewable energy sector, the investment bank had approved â¬ 800m (~ Â£ 61.3bn) in funding for investments in renewables in India, even in 2017.
Rakesh is a journalist at Mercom India. Prior to joining Mercom, he held numerous positions as Business Correspondent, Assistant Editor, Senior Content Editor and Sub Editor at bcfocus.com, CIOReview / Silicon India, Verbinden Communication and Bangalore Bias. Rakesh holds a BA in English from Indira Gandhi National Open University (IGNOU). More articles by Rakesh Ranjan.