SBI, KfW sign $277 mn agreement for energy-efficient housing programme

State Bank of India (SBI) said on Monday it has signed a loan agreement with KfW, the German development bank, for $277 million dollars (about Rs 1,958 crore) for establishing an energy-efficient housing programme in India.

The facility has been signed after an agreement on financial cooperation between the two governments in October.

The programme will be a part of Indo-German Development Cooperation which is guided by the 2030 Agenda for Sustainable Development.

Under the programme, both builders and home buyers will be financed for developing and purchasing energy-efficient residential projects that achieve at least 25 per cent energy savings in comparison to standard reference buildings.

Hence, the programme will contribute to India's policy framework towards energy conservation in the residential building sector and reduction in greenhouse gas emissions.

In addition to the $277 million dollar loan facility, KfW will also extend a grant of 1.5 million euros to SBI as a technical assistance package.

The technical assistance funds will be used for supporting SBI in the preparation, implementation and monitoring of the programme.

Further, an investment grant of 10 million euros has also been provided for incentivising builders to develop housing projects that achieve significantly higher levels of energy savings vis-a-vis standard reference buildings (that is at least 40 per cent savings).

The arrangement of the loan and the grant facilities was facilitated by SBI's investment banking subsidiary SBI Capital Markets Ltd.