SIDBI Secures Green Climate Fund Project

The Small Industries Development Bank of India (SIDBI) has achieved a significant milestone by securing approval from the Green Climate Fund (GCF) for its first anchored project, the Avaana Sustainability Fund (ASF), valued at USD 120 million. The closure was announced at the 38th board meeting of the GCF in Kigali, Rwanda, on March 5, 2024, where the GCF committed to investing USD 24.5 million in the fund.

Objectives of the Avaana Sustainability Fund

The primary goal of the ASF project is to invest in early-stage companies that harness technology-led innovation to drive climate solutions and sustainability in India. The anticipated outcomes of the fund include significant contributions to climate change mitigation, adaptation, and the enhancement of resilience in vulnerable sectors of the Indian economy.

SIDBI’s First Anchored Project with GCF

The ASF project marks the first project anchored by SIDBI and the first secured for India in the past few years. This achievement will go a long way in advancing the country’s nationally determined contributions (NDCs) by effecting substantial global changes through SIDBI’s proficiency in green and climate finance. With several additional projects in the pipeline, SIDBI is poised to play a crucial role in India’s climate action efforts.

The Green Climate Fund: World’s Largest Climate Fund

The Green Climate Fund, a key component of the historic Paris Agreement, is the world’s largest climate fund. The GCF is mandated to assist developing countries in raising and realizing their NDC ambitions by expediting transformative climate action through a partnership-driven approach and deploying flexible financing solutions and climate investment expertise.

GCF’s Investment Strategy

The GCF’s investment strategy targets four significant transitions:

• Built Environment
• Energy Industry
• Human Security, Livelihood, and Wellbeing
• Land Use-forests and Ecosystems

The fund employs four key approaches to achieve its objectives in these transitions.

SIDBI’s Role as an Accredited Entity and Direct Access Entity

SIDBI has been designated as an Accredited Entity (AE) and Direct Access Entity (DAE) with the GCF. In this capacity, SIDBI is responsible for accessing climate finance to implement low-carbon and climate-resilient projects in India. SIDBI will work under the guidance of the Ministry of Environment, Forests and Climate Change (MoEFCC), which serves as India’s Nationally Designated Authority (NDA) for the GCF.

Collaboration with Key Stakeholders and Ministries

As an Accredited Entity (AE) and Direct Access Entity (DAE), SIDBI will liaise with key stakeholders and ministries, including the Department of Financial Services, to ensure the effective implementation of GCF-funded projects in India. This collaboration will be crucial in aligning India’s climate action efforts with its national priorities and international commitments.

As the world’s largest climate fund, the GCF’s support for the ASF project demonstrates the global community’s commitment to assisting developing countries in realizing their NDC ambitions. SIDBI’s role as an Accredited Entity and Direct Access Entity will be crucial in accessing climate finance and implementing low-carbon and climate-resilient projects in India.

Month: Current Affairs - March, 2024

Category: Environment Current Affairs