The Avaana Sustainability Fund (ASF) created by The Small Industries Development Bank of India (SIDBI) has received the green light from the Green Climate Fund (GCF) to roll out its first-ever green climate project with a target to invest $120 million in climate-focused firms. The investment includes $24.5 million from South Korea-based GCF, the world’s largest climate fund.
India, with one-sixth of the world’s population, sees 17 out of every 20 people vulnerable to climate risks, with five living in areas extremely vulnerable to climate change. The country’s dependence on rain-fed agriculture, long coastline, and low social safety nets contribute to its high vulnerability. India’s carbon dioxide emissions have been increasing, with a projected doubling by 2030 in line with economic growth.
The ASF project plans to invest in early-stage companies with a focus on supporting the transition to low-carbon and climate-resilient development pathways by investing in innovative technologies across key sectors such as sustainable resource management, mobility and supply chains, and sustainable agriculture and food systems.
Under the new project, SIDBI will liaise with key stakeholders and ministries, including the Department of Financial Services of the Ministry of Finance. With the capacity to anchor proposals from other entities and submit its own, SIDBI said it is committed to promoting and financing the development of micro, small, and medium enterprises (MSMEs).
SIDBI said it actively supports national action plans on climate change and champions responsible business practices, including sustainable financing and energy efficiency initiatives within the MSME sector.
SIDBI Avaana Sustainability Fund to add value for climate and sustainability leaders ventures
The Avaana Sustainability Fund marks the success of the first project anchored by SIDBI and the first one secured for India in the past few years by an Indian-accredited entity. With several additional projects in the pipeline, SIDBI is stays firm in its commitment to advancing India’s Nationally Determined Contributions (NDCs), effecting substantial global change through its proficiency in green and climate finance, it said in a statement.
The Green Climate Fund is mandated to assist developing countries in raising and realising their NDC ambitions. The GCF expedites transformative climate action through a partnership-driven approach and the deployment of flexible financing solutions and climate investment expertise.
The Avaana Sustainability Fund investment strategy targets four significant transitions: built environment; energy industry; human security, livelihood, wellbeing; and land use-forests and ecosystems, employing four key approaches.
