The State Bank of India (SBI) and the European Investment Bank (EIB) on Friday said they have agreed to back an initiative of €100 million for new high-impact climate action and sustainability business financing.
The importance of the new Neev Fund II to accelerating 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 EIB and SBI will together support the new Neev Fund II investment fund that will unlock climate action and sustainability investment by businesses across India through new equity financing. Under the management of SBICap Ventures, an SBI group company, Neev Fund II will invest up to €100 million in Indian small and medium-sized enterprises (SMEs) and provide growth and expansion capital to companies offering solutions for clean energy, electric vehicles, efficient use of raw materials, and water and circular economy projects in the country. The fund will enable Indian innovative and emerging companies to fund their growth through equity or quasi-equity instruments.
This is one of the EIB’s first private equity investments in India, and results from the EU bank’s commitment to step up its support for climate action projects worldwide and support the implementation of the Paris Agreement.
MD & CEO of SBICap Ventures Suresh Kozhikote said “Neev Fund has leadership status in environmentally and socially conscious investing. It generates commercially attractive returns while making a significant positive contribution to society. Neev Fund II is a worthy successor to our flagship Neev Fund that has set nationwide benchmarks for governance standards and its pioneering work in environmental, social and governance and developmental impacts.”
The EIB-SBI partnership reinforces climate action and environmental sustainability both in India and globally, strengthens the country’s innovative SMEs, sustains and creates jobs, and contributes towards green, long-term and sustainable economic development. EIB Vice-President Christian Kettel Thomsen, who is in charge of operations in India, said “Climate change claims thousands of lives and causes damage amounting to hundreds of billions of euros every year. It does not have to be like this, however, as there is still time to act. Innovative solutions often require innovative forms of financing, such as private equity funds. Our partnership with the State Bank of India will create a much-needed source of equity financing for climate action and environmental sustainability solutions offered by innovative SMEs.