Federal Bank Joins Forces With Ecofy to Accelerate Rooftop Solar Financing For MSMEs

Federal Bank announced a strategic partnership with Ecofy, India’s pioneering green-focused NBFC, to address a critical challenge faced by MSMEs: affordable financing for commercial rooftop solar installations. This collaboration aims to empower MSMEs to transition to renewable energy while contributing to India’s ambitious climate goals. At 2:20 PM on December 18, 2024, shares of Federal Bank traded at ₹202.18 a decline of 4% on the NSE.

Tackling Financing Challenges for MSMEs

Rooftop solar installations are an ideal energy solution for MSMEs, particularly in the manufacturing sector, where daytime electricity usage is predominant. However, financial barriers, such as high-interest loans and reluctance from lenders, have hindered widespread adoption. This new co-lending partnership between Federal Bank and Ecofy seeks to bridge this gap, offering innovative financing solutions tailored for solar projects ranging from 20 to 200 kW.

Aiming For Impactful Change

The program targets the financing of 3,600 kW of rooftop solar capacity annually. This initiative is expected to benefit numerous MSMEs, reducing their electricity costs and cutting over 2,500 tons of CO2 emissions each year. Such efforts underline the importance of decarbonisation and the role MSMEs play in fostering sustainable growth.

Shalini Warrier, Executive Director of Federal Bank, highlighted the significance of this partnership, saying, “By offering accessible financing for rooftop solar equipment, we are empowering MSMEs to reduce electricity costs while contributing meaningfully to India’s climate goals.”

Federal Bank’s Commitment to Green Financing

Federal Bank has consistently supported the MSME sector, with loans to MSMEs comprising more than 20% of its total loan book. This collaboration aligns with the bank’s broader green initiatives, which include specific loan schemes for renewable energy and other eco-friendly projects.

Ecofy: A Catalyst for Sustainability

Backed by Eversource Capital, Ecofy brings extensive experience in solarizing residential and commercial rooftops. With partnerships with leading OEMs like Tata Power and Mahindra Solarize and a network of over 1,000 EPC partners, Ecofy is driving impactful green energy solutions across India.

Rajashree Nambiar, Co-founder and CEO of Ecofy remarked, “Our partnership with Federal Bank unlocks financing opportunities for MSMEs and addresses a historically underserved segment in the solar lending space.”

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