The Small Industries Development Bank of India (SIDBI) has achieved a significant milestone with the approval of its inaugural green climate project, the Avaana Sustainability Fund (ASF), by the Green Climate Fund (GCF). This pioneering initiative, backed by a $120 million investment, is geared towards bolstering early-stage companies and micro, small, and medium enterprises (MSMEs) at the forefront of technology-driven innovations for climate solutions and sustainability within India.
Contributing $24.5 million, the GCF, headquartered in South Korea, underscores its commitment to the ASF. The ASF project is strategically aligned to make meaningful strides in climate change mitigation, adaptation, and bolstering resilience across vulnerable sectors of the Indian economy. By strategically targeting four key transitions—built environment, energy industry, human security, livelihood, wellbeing, and land use-forests and ecosystems—the fund aims to propel transformative climate action in accordance with the monumental Paris Agreement.
Recent studies underscore the hurdles faced by MSMEs in embracing sustainability practices, ranging from limited technical know-how to financial constraints. Nevertheless, there’s a palpable uptick in MSMEs’ consciousness regarding the merits of green financing and sustainability, not solely for environmental stewardship but also for enhancing brand reputation and competitiveness.
SIDBI’s ASF project is poised to tackle these obstacles head-on by furnishing indispensable support and resources, empowering MSMEs to enact sustainability initiatives with efficacy. As an Accredited Entity (AE) of the GCF, SIDBI occupies a pivotal role in accessing climate finance to usher in low-carbon, climate-resilient projects across India.
The bank remains steadfast in its commitment to advancing national climate action plans and championing responsible business practices within the MSME sphere. With a robust pipeline of forthcoming projects, SIDBI remains dedicated to fostering MSME growth, aiding India in fulfilling its Nationally Determined Contributions (NDCs), and fostering global transformation through green and climate finance.
