The objective of the project is expected to encourage MSME units to undertake energy saving investments in plant and machinery to reduce energy consumption, enhance energy efficiency, reduce CO2 emissions, and improve the profitability of the units in the long run.

1.  New / existing MSME units, as per the definition of the Micro, Small & Medium Enterprises Development (MSMED) Act, 2006 (www.Laghuudyog.com; www.Smallindustryindia.com).
2. Existing units should have satisfactory track record of past performance and sound financial position
3.  Energy saving projects will be screened as per the Energy Saving Equipment List, which is available on SIDBI or JICA Project website
4.  Units should have minimum investment grade rating of SIDBI
5.  Sectors such as the arms industry, narcotics industry or any unlawful businesses are not eligible. Similarly, such projects which may result in larger negative social and environmental impact are also not eligible under this scheme.
6.  Equipment/machinery with energy saving potential less than 10% is not eligible.

The financial parameters for appraising the projects are:

Parameter	Norms
Minimum Assistance	Rs.10 lakh
Minimum promoters contribution	25% for existing units 33% for new units
Debt Equity Ratio	Maximum 2.5 :1
Interest Rate	As per credit rating and 0.75% below the normal lending rate
Upfront fee	Non-refundable upfront fee of 1% of sanctioned loan plus applicable service tax
Security	First charge over assets acquired under the scheme; first/second charge over existing assets and collateral security as may be deemed necessary
Asset coverage	Minimum Asset Coverage should be 1.4 : 1 for new units and 1.3 : 1 for existing units
Repayment period	Need based. Normally, the repayment period does not extend beyond 7 years. However, longer repayment period of more than 7 years may be considered under the Line if considered necessary

The prospective borrower is required to submit the duly filled in application form along with the supporting documents as per the prescribed format, to the nearest SIDBI branch office. In addition to the information requested for in the application form, it may be ensured that the prospective borrower explicitly provides details of the energy saving potential of the project. This will be an important parameter for deciding the eligibility of the project financing under the Line of Credit.

ENERGY EFFICIENCY VERTICAL
SME Development Centre 
Plot No. C-11, 'G' Block, 
Bandra Kurla Complex, Bandra (East) 
Mumbai
Tel:(O) 022 – 67531230
email: EEC_Credit@sidbi.in