Context:
The Small Industries Development Bank of India (SIDBI) is set to sign an agreement with the Green Climate Fund (GCF) in mid-May 2025 to mobilize climate-focused investments for small businesses in India.
Key Highlights
1. Objective of the Pact
- To support MSMEs in transitioning to low-emission and climate-resilient technologies.
- Aim to foster innovation in climate-tech and promote green entrepreneurship.
2. Fund Structure
- Total Fund Size: $1 billion
- SIDBI’s Contribution: $800 million
- Most of this amount will be raised from other sources, with SIDBI anchoring the effort.
- The remaining portion is expected from GCF and other global partners.
3. Strategic Significance
- This fund will:
- Help green India’s MSME sector
- Align with India’s climate goals and energy transition targets
- Create climate resilience in vulnerable business segments
4. Timeline
- Signing of the pact is scheduled for mid-May 2025, marking a significant step toward public-private climate financing collaboration.
The Green Climate Fund (GCF)
The Green Climate Fund (GCF) is a global climate finance fund established by the UN Framework Convention on Climate Change (UNFCCC) in 2010. Its primary goal is to assist developing countries in addressing climate change by supporting both mitigation and adaptation efforts. The GCF aims to mobilize funding at scale to invest in low-emission and climate-resilient development projects and programs.
Implications for MSMEs
- Easier access to green finance
- Support for clean energy adoption, efficient manufacturing, and sustainable practices
- Potential to unlock global carbon credits and incentives
This initiative marks a milestone in climate finance, positioning SIDBI as a key player in India’s green transition strategy for MSMEs.
