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responsAbility teams up with Electronica to expand green lending activities in India


Mumbai: Impact investment firm responsAbility and Pune based non-banking finance company Electronica Finance Limited (EFL) have entered into an agreement to issue green Masala Bonds for expanding EFL’s energy efficient machinery lending portfolios to small enterprises, that operate in carbon intensive manufacturing sector. EFl has issued rupee-denominated senior secured bonds of USD 10 million.

Zurich based responsibility manages assets worth USD 3billion to nearly 540 companies.

“India has committed to reduce the emissions intensity of its GDP by one third between 2005 and 2030. The Indian SME sector currently contributes 45% of the country’s total greenhouse gas emissions from the manufacturing industries and is widely suffering from obsolete technology and lack of funding. All of this results in considerable potential for greenhouse gas mitigation”, both the firms said in a joint press statement.

EFL is an NBFC that finances SMEs across India in the manufacturing and service sectors. This fund will be specifically used to fund equipment’s in the machine tools, plastic and printing & packaging industries. The total loans for financing these machines dominate EFL’s USD 180 m gross loan portfolio.

Both the partners have agreed on a multi-phase plan for both near-term and medium-term green lending development. Part of these funds will also be used by EFL to diversify its product offering and to expand into financing solar PV for the commercial and industrial markets.

“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.

Source: Economic Times