SBI and EIB tie up for € 100M sustainability funding

State Bank of India (SBI) and The European Investment Bank (EIB) announced on Friday that they have agreed to support a new initiative of €100 million for new high-impact climate action and sustainability business financing.

“The importance of the new Neev Fund II to accelerate India’s green recovery from covid-19 and strengthening sustainable investment was highlighted by EIB President Werner Hoyer in discussions ahead of the formal announcement at the EU-India leaders’ meeting in Portugal,” the statement said.

The EIB and SBI will collectively back the new Neev Fund II investment fund that will unlock climate action and sustainability investment by enterprises across the country through new equity financing, it said.

Under the management of SBICap Ventures, an SBI group company, Neev Fund II will invest up to €100 million in Indian SMEs and render growth and expansion capital to businesses proposing solutions for clean energy, electric vehicles, effective use of raw materials and water, and circular economy projects in the country. 

The fund will allow innovative and emerging companies in India to finance their growth with equity or quasi-equity instruments.

Christian Kettel Thomsen, vice-president of EIB and in charge of India operations said ‘Our tie-up with SBI will generate a much-needed source of equity financing for climate action and environmental sustainability solutions offered by innovative small and medium enterprises.’

Dinesh Khara, chairman, SBI said, the union of the two institutions, will further strengthen and increase the relationship between India and the European Union.

The Neev Fund II will offer equity and quasi-equity to small businesses, focusing on sectors that promote the fulfillment of the UN Sustainable Development Goals (SDGs). This could include businesses proposing solutions for the development of new technology for climate change, environmental protection, electric vehicles, and any other innovative products and services that could help climate action across the world.

Climate change has become one of the most concerning issues of the present time. The tie-up of the two organizations looks promising and will hopefully benefit many small businesses in this space.

Shishir Gupta, Founder and CEO, StartupLanes

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