SMALL Industries Development Bank of India (SIDBI) on Monday signed a memorandum of understanding (MoU) with Ludhiana Hand Tools and Forging Envirocare Pvt Ltd. The latter is a special purpose vehicle (SPV) floated by SME units in Ludhiana's steel forging cluster. This is a part of SIDBI's vision to enable SMEs embrace green technologies and facilitate environmental protection.
The World Bank has given its backing to this initiative by agreeing to purchase 9,90,000 CER units from the SPV. The bank is also helping the SPV in the development and implementation of the CDM project. Around 300 SMEs are expected to benefit from the project.
The MoU was signed in the presence of R M Malla, Chairman & Managing Director, SIDBI, and Charles Cormier, Team Leader, Energy & Environment, India, World Bank.
As per the MoU, SIDBI will collaborate with the SPV to provide financial assistance to SMEs participating in the clean development mechanism (CDM) project being implemented at the steel forging cluster in Punjab.
SIDBI-Ludhiana SPV combine will encourage SMEs to take up energy saving initiatives. Energy thus saved would reduce carbon dioxide emissions and result in accrual of CER units. This would make SMEs eligible for revenues through sale of CER. The SPV's role would be to bundle the CER accruals and provide other services to the units. Speaking on the occasion, Malla said "With global warming becoming a prime concern area worldwide, we are proud to be facilitators of this "green initiative SIDBI has been trying to provide innovative solutions to SMEs and that we are happy to be their integral partner for the energy saving initiative in the Ludhiana CDM project."