After HSBC signed an MoU with the Bureau of Energy Efficiency (BEE) to finance energy efficiency projects, it is now YES bank’s turn. “We will be signing an MoU with YES Bank in the very near future,” an official from BEE told Governance Now.

The MoU will establish the Energy Efficiency Financing Platform (EEFP), which seeks to help companies to get financing for their energy efficiency projects. “This is part of a larger set of agreements that we are doing with financial institutions. The key is that we want financial institutions to lend for energy efficiency,” the official said.

The official said that the banks won’t mind giving loans to companies with a great balance sheet, but it is the start-up companies which face a problem. He said that the repayment of loans taken by the small companies for energy efficiency depend on the repayment of the energy efficient projects. “The goal of this is to be able to hold their hands in the first few transactions that they do,” he added.

All the banks also share their experiences as far as energy efficiency is concerned because as they lend they know what the issues are, how do you deal with them so all of them are learning together, he added. “That shortens the learning period for the banking industry. So that’s why we created this energy efficiency financing platform,” the official added.

He said that getting HSBC was important because it is a private sector bank. “With public sector banks you can do directives. But a private sector bank implies that they are doing this because they see that this is a commercial market that is going to develop. It sends a strong signal in the way market energy efficiency is going to occur in the future,” the official said.

The BEE has already signed MoUs with PTC Financial Services, SIDBI and IREDA for EEFP.