IDBI partners IFC to provide carbon finance in India

New Delhi, Dec 15: Industrial Development Bank of India Ltd (IDBI) today entered into a partnership with International Finance Corporation (IFC), the private sector arm of the World Bank Group, for providing carbon finance to domestic companies.

The two financial intermediaries will assist companies realise the value of the carbon credits, arising from the implementation of Clean Development Mechanism (CDM), by selling the credits in the global markets.

Domestic companies planning to undertake CDM projects under the Kyoto protocol will be able to avail the project identification, funding implementation of CDM projects, registration and verification, advisory services for trading certified emission reduction (CER) units from the IDBI-IFC combine.

In October this year, IDBI had entered into a similar non-exclusive MoU with Mitcon, a Pune-based technical consultancy organisation.

''The IDBI-IFC combine will not only assist Indian companies, both large and small, to undertake CDM projects but also help boost their bottomline by selling the resultant CERs forward in the global markets. While the sale of CERs will give companies additional revenue, IDBI stands to gain in the form of additional fee income,'' IDBI Chairman V P Shetty said.

IFC Director for South Asia Iyad Malas said, ''The proposed partnership is an important step towards promoting projects that reduce carbon emissions and enable clients to earn carbon credits.

IFC's global expertise in carbon finance and IDBI's deep local knowledge will be key to assisting Indian sponsors participate in this new market.'' IDBI is currently working on some CDM projects in the textiles, steel, power, paper and sugar sectors. It expects to assist many more companies to implement CDM projects by the end of this financial year.

The bank also plans to pool CERs generated by small and medium enterprises (SMEs) and sell them globally in market lots of 50,000 to 1,00,000 CER units.

The move to aggregate CERs is significant as a typical SME in India can generate far lesser CERs annually than the international market lot.

IDBI's net profit during H1 2006-07 grew 21 per cent year-on-year to Rs 290 crore. During the financial year ended March 31, 2006, the public sector bank earned a net profit of Rs 561 crore.

UNI