New Delhi, Mar 2 (PTI) Union Minister Nitin Gadkari on Tuesday urged micro, small and medium enterprises (MSMEs) to apply for a scheme offering concessional debt finance to install rooftop solar for improving their business efficiency.
Addressing a virtual event, the Minister for MSME and Road Transport & Highways said rooftop solar offers an excellent value proposition to MSMEs by significantly bringing down cost of electricity consumption, which on an average, is up to one-fifth of their operations cost.
'To assist MSMEs in implementing rooftop solar projects, the ministry is working with the World Bank on a credit guarantee programme to make financing accessible to unrated MSMEs.
'Considering the rates of solar power from large utility power plants have come down to a record Rs 1.99 per kWh, MSMEs must leverage this opportunity to bring down their energy expenses,' he said.
In 2016, the World Bank launched the 'Solar Rooftop Financing Program' being implemented by State Bank of India (SBI).
With a view to addressing the issues on the debt side and to give a fillip to the sector, SBI has availed a USD 625-million line of credit from the World Bank specifically, for financing rooftop solar (RTS) projects across the country through its identified branches.
A countrywide customised financial product has been developed by SBI that covers 75 per cent of the project financing requirement along with other favourable terms such as repayment period, moratorium, and security.
'I urge MSMEs to apply for the scheme by visiting their nearest SBI branch and avail benefits of this scheme,' Gadkari said.
Addressing the gathering, SBI Chairman Dinesh Kumar Khara said, 'The idea is to really educate MSMEs about the benefit of adopting solar rooftop and achieving cost-competitiveness.' The MSME sector, through SBI's current rooftop solar (RTS) lending portfolio, can leverage concessional debt and fulfil India's ambitious target for large-scale implementation of rooftop solar.
The World Bank is working with the MSME ministry to bring in a credit guarantee mechanism for lending to MSMEs who would like to reduce their energy expenses in the long term by investing in rooftop solar.
The minister observed that a large amount (average Rs 8 and higher per unit) is being paid by the MSMEs for power consumption, which contributes to up to one-fifth of the overall production costs.
Referring to a meeting he chaired recently on Lithium-ion battery with research institutes, science and technology departments, Gadkari said he estimates that within the next two years, the prices of electric two-wheeler, four-wheeler and bus will be at par with the prices of petroleum vehicles, which will improve pollution. PTI RSN HRS hrs