Federal Bank, a top private sector bank in India, has teamed up with Ecofy, the country’s first green-only non-banking financial company (NBFC), supported by Eversource Capital. This partnership aims to provide innovative financing options for MSMEs looking to invest in commercial rooftop solar installations. It is one of the first co-lending collaborations in India tailored to meet the specific solar financing needs of the MSME sector.
The program aims to finance 3,600 kW of rooftop solar installations every year, helping many MSMEs while reducing over 2,500 tons of CO2 emissions annually. This will promote faster decarbonisation and support sustainable growth. Since most manufacturing MSMEs use electricity during the day, rooftop solar is a perfect fit. However, financial barriers have often held them back from switching to renewable energy, with many lenders either hesitant to offer loans or charging very high interest rates.
Shalini Warrier, Executive Director at Federal Bank stated, “This collaboration with Ecofy represents our commitment to supporting sustainable business practices. By offering accessible financing for commercial rooftop solar equipment, we are empowering MSMEs to reduce electricity costs while at the same time contributing meaningfully to India’s climate goals”
Commenting on this alliance, Rajashree Nambiar, Co-founder, Managing Director & CEO at Ecofy mentioned, “The MSME sector represents a critical segment in India’s economic landscape, yet there are significant challenges in adopting sustainable energy solutions. Our partnership with Federal Bank is strategically designed to unlock financing opportunities for solar installations in the 20-200 KW range, which has historically been a challenging lending whitespace for financial institutions.”
The co-lending partnership between Federal Bank and Ecofy for funding rooftop solar installations highlights the bank’s commitment to supporting green initiatives by businesses and industries. This aligns with the global and national push for decarbonisation. Federal Bank is actively financing the growing MSME sector, with MSME loans making up over 20% of its total loan book.
The bank also offers a dedicated green loan scheme to fund solar and other eco-friendly projects for Business Banking customers. Ecofy brings significant expertise to the collaboration, having successfully solarized both residential and commercial rooftops in the past two years. With partnerships with top OEMs like Tata Power, Waaree, Luminous, and Mahindra Solarize, Ecofy works with over 1,000 EPC partners to deliver effective green energy solutions.
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