Swiss impact investor responsAbility bets on non-bank lender Electronica Finance
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Swiss asset manager responsAbility Investments AG, via its climate fund, has invested $10 million (Rs 69.5 crore at current exchange rates) in green masala bonds issued by Pune-based non-banking finance company Electronica Finance Ltd (EFL), the impact investor said in a statement.

The NBFC will deploy the capital to lend to its energy-efficient machinery portfolio for small and medium-sized enterprises operating in the carbon-intensive manufacturing sector, the statement added.

The NBFC caters to SMEs across the manufacturing and service sectors, including machine tools, plastic, and printing and packaging industries. Loans to finance these machines dominate EFL’s $180-million gross loan portfolio, the statement said.

Jaskirat Chadha, principal for financial institutions debt for Asia-Pacific at responsAbility said that partnering with EFL will allow the firm to integrate green lending into the SME sector and, as a result, sustainably reduce carbon emissions.

The Indian SME sector currently contributes to 45% of the country’s total greenhouse gas emissions via its manufacturing industries. The sector also widely suffers from obsolete technology and lack of funding.

EFL has partnered with Small Industries Development Bank of India for over a decade to finance loans for its energy-efficient machines. The NBFC manages a significant portfolio for SIDBI.  EFL plans to diversify its product offering and will finance solar photovoltaic technology for the commercial and industrial markets.

“By enabling Indian SMEs to improve their energy efficiency and processes, we will further support them in making them competitive and our economy more sustainable and resilient,” Shilpa Pophale, managing director of EFL, said in the statement.

In November 2017, EFL said it was looking to raise its first round of external equity capital to expand its operations, diversify its product offerings and deleverage its balance sheet.

The company is currently fully-owned by the father-daughter duo of Shrikant and Shilpa Pophale.

Formerly known as Electronica Leasing and Finance Ltd, EFL is part of the 45-year-old industrial machinery tool maker SRP Electronica Group.

responsAbility Investments

Founded in 2003, the Swiss impact investor provides debt and equity financing predominantly to unlisted companies in emerging economies. With about $3 billion of assets under management, it has invested in about 540 companies in 90 countries, information on its website shows.

In January this year, responsAbility along with homegrown NBFC Northern Arc Capital invested debt capital worth $10 million (Rs 71 crore) in Aye Finance Pvt. Ltd.

In October last year, responsAbility picked up a minority stake by investing an undisclosed sum in organic food exporter Suminter India Organics Pvt. Ltd. This was the Swiss asset manager’s second investment in the food and agriculture sector in the country.

It has also invested in the non-banking financial company Kinara Capital, Samunnati Financial, biomass aggregator Punjab Renewable Energy Systems, sanitary services provider Saraplast Pvt. Ltd and business process outsourcing service provider DesiCrew Solutions Pvt. Ltd.

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