It will do technical appraisal and recommend the viable ones to financial institutions
The Energy Department has set up a committee comprising the officers of Union Bank of India, State Bank of India, Punjab National Bank, YES Bank, Indian Overseas Bank, Central Bank Of India, HDFC Bank, NABARD, Power Finance Corporation and IIFL to facilitate funding to the energy-efficiency (EE) projects.
These Financial Institutions (FIs) will get the benefits of Partial Risk Guarantee Funding for Energy Efficiency (PRGFEE) scheme on being empaneled with the Bureau of Energy Efficiency (BEE), according to a release by State Energy Conservation Mission (SECM) CEO A. Chandra Sekhar Reddy, who has been appointed the committee convener. He said under the PRGFEE scheme, the BEE will provide partial guarantee to loan amount for EE projects implemented through the BEE- empanelled energy service companies.
The committee will propose policy initiatives for increasing EE financing and development of EE market in the State.
The SECM will invite EE proposals in different sectors such as industries (large or small), buildings and agriculture, do technical appraisal of the projects and will recommend the viable ones among them to the financial institutions for funding.
The SECM will also pave the way for signing of MoUs with the BEE, which leads to project financing under the PRGFEE.
In the meeting, Energy Secretary N. Srikant said 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. It (BEE) has allotted around ₹312 crore for the PRGFEE at the national level.
Under the PRGFEE scheme, the BEE will provide guarantees up to 50% of the loan or ₹10 crore per project, whichever is less, to the financial institutions which offer loans to industries or others to take up the EE projects in the State.
In case of default, the fund will cover the first loss subject to maximum of 10% of the total guaranteed amount and cover the remaining default (outstanding principal) amount on pari-passu (equal footing) basis up to the maximum guaranteed amount.