SBI launches carbon credit finance

Mumbai, August 06, 2007: State Bank of India (SBI), today entered into Memorandum of Understanding (MoU) with MITCON Consultancy Services Limited, Ecosecurities India Private Ltd and Cantor CO2E India Private Ltd for jointly providing one-stop solutions to industries for Clean Development Mechanism (CDM) projects and emissions trade. The MoU was signed by Mrs. Bharati Rao, Deputy Managing Director & Chief Credit Officer in the presence of Shri O.P. Bhatt, Chairman, Shri T.S. Bhattacharya, Managing Director, and other senior functionaries of the Bank at SBI's Corporate Office in Mumbai.

Speaking on the occasion, Shri O.P. Bhatt said, "As India's largest Bank, we have a strategic role to play in addressing environmental issues, both in terms of the risks they pose and the new opportunities they create. SBI, proposes to provide a single point delivery of services related to Carbon Credits / Clean Development Mechanism (CDM), under the Kyoto Protocol, to its customers. These include apart from finance to implement CDM projects, advisory services and value added products like securitization of carbon credit receivables, carbon credit delivery guarantees and escrow mechanism for carbon credits. With its large base of SME customers SBI sees the possibilities for aggregating / bundling of individual CDM projects from SMEs into viable sized lots as a specific and special area of thrust. Creating awareness of the CDM among the industrial units and the additional cash flows it would generate would be the focus of the Bank. With so many potential buyers and sellers in this market, counter party risk can become a key risk in carbon credits trading and SBI with its wide Indian and International presence can play a major role here. Apart from the opportunity of generating substantial fee based income, this is also an opportunity for the Bank to support the fight against global warming. The change in the Earth's climate and its adverse effects are a common concern of humankind and as a responsible Corporate citizen, the Bank also shares this concern and would like to contribute its mite towards this cause ".

Analysts peg the global carbon trading market at $100 billion by 2010. Indian carbon market has the potential to supply 30-50% of the projected global market of 700 million CERs by 2012. SBI is chalking out an aggressive strategy to tap into this market.

The tie up with reputed CDM Consultants will benefit a large number of industrial units who will from a complete package of services through guidance from reliable partners with proven experience in the Carbon Credit business with the backing of State Bank of India.