Mumbai: Public sector lender IDBI Bank Ltd on Tuesday said it has signed a deal with US-headquartered World Resources Institute (WRI), an environmental research institute, through which it will be giving loans for energy-saving equipments to small and medium organizations.
Under the agreement, WRI will evaluate and guarantee on the amount of savings to be achieved by implementing the energy saving equipment. IDBI will give the loans based on those guarantees. The loan will be serviced through the cost saved, said IDBI’s executive director for small and medium enterprises T.R. Bajalia.
“Any shortfall will be paid by WRI,” said Bajalia. “The loans will be repaid by the companies out of the savings done through implementing these instruments. It won’t be an additional burden on the borrower,” he added.
The industries that can benefit through this initiative include forging units, textile mills, steel product making units etc where the energy used is extensive and pollutions high.
IDBI can also fine tune the terms of the loans taking the carbon credit generated by the company through this saving, and may give 0.50% discount on loans taken for this purpose, said Bajalia. IDBI’s SME loan rates vary between 12-14%, depending upon the rating of the client.