The European Investment Bank (EIB) and the State Bank of India (SBI) have agreed to back a new €100 million initiative for new high-impact climate action and sustainable business financing.

The Neev Fund II aims to accelerate India’s green recovery from COVID-19 and strengthen sustainable investment across the country through new equity financing.

Under the management of SBICap Ventures, an SBI Group company, the Fund will invest in small and medium sized businesses (SMEs) and provide growth and expansion capital to companies offering solutions for clean energy, electric vehicles (EVs), efficient use of raw materials, water and circular economy projects.

It will provide support to SMEs, targeting sectors that support the achievement of the UN Sustainable Development Goals (SDGs), particularly aiming to tackle climate change through energy, agricultural, water and waste management technologies.

EIB Vice President Christian Kettel Thomsen, in charge of operations in India said: “Climate change claims thousands of lives and causes damage amounting to hundreds of billions of euros every year. It does not have to be like this, however, as there is still time to act. Innovative solutions often require innovative forms of financing, such as private equity funds.

“Our partnership with the State Bank of India will create a much-needed source of equity financing for climate action and environmental sustainability solutions offered by innovative SMEs. Saving our planet from climate change requires an all-hands-on-deck approach and the EIB is proud to have found an ally in the State Bank of India ready to deploy innovative financing solutions for global climate action. This is a true sign of the global impact of the EU-India partnership.”