Mumbai: A climate fund managed by impact investor responsAbility has invested $10 million in green masala bonds sold by non-banking financial company Electronica Finance Ltd, the investor said in a statement on Tuesday.

Electronica has sold rupee-denominated senior secured bonds worth $10 million, the investor said. The funds will be used to expand Electronica’s energy-efficient machinery lending portfolio for small and medium-sized enterprises (SMEs) operating in the carbon-intensive manufacturing sector. Electronica is a Pune-based financier serving SMEs in the manufacturing and services sectors.

The funds will be utilized for financing equipment in the machine tools, plastic and printing and packaging industries. Loans for financing these machines dominate Electronica’s $180 million gross loan portfolio. Its product portfolio includes business loans, working capital loans and industrial property loans in addition to its flagship product of machinery loans.

Electronica is an experienced player in the green lending sector, having associated with Small Industries Development Bank of India (Sidbi) to finance energy-efficient machines for over a decade. Through this green bond issuance, the company seeks to further expand its technologically advanced, energy-saving machine finance portfolio.

“By enabling Indian SMEs to improve their energy efficiency and processes we will further support them in making them competitive and our economy more sustainable and resilient," said Shilpa Pophale, managing director of EFL.

Electronica and responsAbility have agreed on a multi-phase plan for both near-term and medium-term green lending development, the statement said. Electronica also plans to diversify its product offering and to expand into financing solar panels for commercial and industrial markets.

“Partnering with Electronica, which is well established as a lender to the MSME segment, to expand their energy efficiency lending portfolio, will allow us to integrate green lending into this sector and, as a result, sustainably reduce CO2 emissions," said Jaskirat Chadha, principal, financial institutions debt for Asia-Pacific at responsAbility.

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