8 banks to finance energy efficient projects in Andhra Pradesh

Vijayawada: In a major development, for the first time, the AP State Energy Conservation Mission (APSECM-Energy department) has constituted a committee of eight banks and three non-banking financial companies for facilitating financing for energy efficiency projects in the State.

The 8 banks are Union Bank, SBI, PNB, YES Bank, IOB, Bank Of India, Central Bank of India and HDFC Bank and the three non banking institutions are NABARD,PFC,IIFL Home Loans.

These financial institutions will get benefit of partial risk guarantee funding for energy efficiency (PRGFEE) scheme if they empanel with Bureau of Energy Efficiency (BEE), the Government of India under the scheme. Members of financial institutes have appreciated and welcomed the initiative of APSECM/State designated agency(SDA) of AP and assured full cooperation for sanction of loans for energy efficiency projects. Under the PRGFEE scheme, BEE, Central government will provide partial guarantee to loan amount for energy efficient projects which are implemented through BEE empanelled ESCOs. This will help to scale up energy efficiency investments in AP for energy efficiency projects.

In a meeting with banks and NBFCs, a committee was constituted by secretary/energy by nominating executive of Union Bank of India as chairman, executive of State Bank of India as vice-chairman and chief executive officer of APSECM, SDA of AP, energy department as convener.

The financial committee shall address the energy efficient projects at the State level which are facing financing issues and the members of the committee shall finance these projects on technical recommendation of APSECM, SDA of AP. The committee will also propose any policy initiatives for increasing energy efficiency (EE) financing and development of EE market in the State.

APSECM shall seek EE proposals from various stakeholders in different sectors such as industries (large or small), buildings, agriculture, etc and carry out technical appraisal of EE projects and based on technical viability, it will recommend the project to the FIs committee for financing such EE projects. Also, APSECM shall pursue with the financial institutes of the committee to enter MoU with BEE to get eligible to provide financing under PRGFEE (Partial risk guarantee fund for energy efficiency financing) scheme of BEE.

Speaking on the occasion, energy secretary Srikant Nagulapalli said that the PRGFEE is an innovative financial instrument which uses the public resources to channelize private sector finance towards promoting of energy efficiency in different sectors. The BEE has formulated a risk sharing mechanism to provide financial institutions with a partial coverage of risk involved in extending loans for energy efficient projects. The BEE has allotted around Rs 312 crore for the PRGFEE at national level.