India Contemplates Financial Aid for Energy-Efficient Technologies in MSMEs

The Indian government is considering a new program to help micro, small, and medium enterprises (MSMEs) adopt energy-efficient technologies.According to sources familiar with the matter, the Power Ministry has begun discussions on providing interest subvention through the Assistance in Deploying Energy Efficient Technologies in Industries & Establishment (ADEETIE) Scheme.

The ADEETIE Scheme, managed by the Bureau of Energy Efficiency, is an online platform aimed at promoting and expanding energy efficiency financing.This initiative comes in response to the government's recognition of the financial difficulties MSMEs face when upgrading their technology, as such improvements are often costly for smaller enterprises.

The proposed scheme is likely to be structured to offer higher interest subvention for greater efficiency and energy savings.Technologies that might be supported include automation and control systems for better resource utilization, combustion control systems for boilers, pocket ventilation systems, air-dyeing technology, and methane capture technology, among others.Sources suggest that the allocation for interest subvention could be around Rs 2,000 crore, potentially rolled out in phases.The initial phase could involve Rs 1,000 crore, with additional tranches based on the program's reception.

This initiative aligns with the government's broader goals of promoting energy efficiency and sustainable development within the MSME sector.The Bureau of Energy Efficiency has previously highlighted the importance of MSMEs adopting green and efficient manufacturing processes for India's overall energy efficiency.The proposal, which has been under consideration for some time, is seen as a strategic move to support MSMEs in adopting new technologies.

Once these technologies reach scale, the financial support may be gradually phased out.As energy consumption continues to increase in India, both the Power and Renewable Energy Ministries have emphasized energy efficiency measures.The government's focus on providing financial support to MSMEs and other establishments for this purpose appears to be gaining momentum.