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Promoting energy efficiency for small and medium-sized enterprises, AFD, India
AFD supports the sustainable growth of Indian SMEs through energy efficiency projects financed by SIDBI.

Indian SMEs, the number of which was estimated at 46 million in 2015, employ 106 million people and are a major engine of India’s economic growth. They account for over 45% of India’s industrial production and 25% of the energy consumption of its industrial sector. They have a direct impact on both employment and energy consumption in the sector.

SMEs have substantial potential for energy savings. However, return on investment for energy efficiency is not valued by industries or financial institutions, which are generally reluctant to finance this type of investment.

The financial institution Small Industries Development Bank of India (SIDBI), was set up by the government of India to promote and refinance the SME sector. SIDBI has recently defined the green economy sector as a strategic focus for growth in its activity. This includes promoting energy efficiency and renewable energies.


The loan allocated to SIDBI by AFD has allowed it to bring a technical and financial support to the sustainable growth of Indian SMEs, by financing investments in high energy performance equipment.

Owing to French expertise in energy efficiency, a technical assistance component has built the capacities of SIDBI’s Energy Efficiency Unit, raised SMEs’ awareness of energy efficiency issues, and evaluated the project’s environmental impacts.

The project has benefited over 400 projects nationwide and in various sectors, such as ceramics, textiles, foundry and metallurgy.

  • More than 400 Indian SMEs have received support for the implementation of actions that lead to a reduction in their specific consumption and thereby limit their greenhouse gas emissions, without hampering their growth.
  • The energy saved thanks to this financing is estimated at 84.3 GWh a year.
Project start date
Project end date
3 years
Duration of funding
50 000 000
Financing amount
Small Industries Development Bank of India (SIDBI)