Small Industries Development Bank of India (SIDBI) has launched a “Decarbonization Challenge Fund” (DCF) to support innovative and scalable technologies and projects and solutions that are environment-friendly, clean, and have high impact potential.

This competitive mechanism will crowd-source innovative solutions across themes that address industrial decarbonization challenges such as energy efficiency, renewable energy, clean transportation, pollution prevention control, and green buildings.

DCF is being launched as part of SIDBI’s Partial Risk Sharing Facility for Energy Efficiency (PRSF) program and is supported by the World Bank.

The Fund was launched to address the need for innovative initiatives that do not fit into regular financing programs and thus do not have access to funds from mainstream lending ecosystems. DCF aims to bridge this funding gap.

The Fund will offer financial support to village entrepreneurs, micro, small, and medium enterprises (MSMEs), nonprofit organizations, and educational institutions focused on curating sustainable, efficient climate change technologies.

DCF expects impact-oriented projects/ideas that address the problems of the bottom of the pyramid, which target village-level enterprises, micro-enterprises, and unprivileged or underserved segments of society as beneficiaries.

Applicants will be assessed on parameters based on their proposal containing the proposed action, project budgeting, inclusivity of benefits, impact-oriented innovation, sustainability impact, and presentation. The projects are expected to demonstrate a substantial potential in energy saving and GHG emission reduction.

The period of implementation should be between 3 and 12 months, with additional validity of withdrawal up to 3 months after the project’s completion.

SIDBI has been offering 100% loans for rooftop solar installations that allowed MSMEs to substantially reduce their power costs. The loans cover the cost of equipment, any machine, or electric vehicles.

Early this year, it also launched a lending program that made the purchase of electric two and four-wheelers more affordable. The pilot program has two components- direct lending and indirect lending.