Mumbai: State Bank of India (SBI) has launched a new initiative to finance eight so-called sunrise sectors like renewable energy, advanced cell chemistry & battery storage, electric mobility, green hydrogen, semiconductors, decarbonisation, smart infrastructure, and data centre.
The bank's centre called Chakra will serve as a knowledge-led platform to enable financing for next-generation, technology-driven and sustainability-focused sunrise sectors. SBI will focus directing capital flows to these sectors, strengthening risk assessment capabilities in the financial sector and developing innovative financing structures aligned with evolving business models.
SBI has partnered with two dozen institutions including the World Bank, Japanese lenders MUFG and SMBC, all public sector banks, academic institutions and think tanks to finance the needs of these which are estimated to be about Rs 20 to Rs 22 lakh crore in the next five years.
"These are sectors which have huge manufacturing potential in India and also have unique risks while assessing these projects. We would like to build the capacity in the system both in terms of the financial world capability as well as industry policy advocacy," SBI chairman CS Setty said.
Financial services secretary M Nagaraju said by 2030, these eight sunrise sectors are expected to entail capital investment of over Rs 100 lakh crore which the central government will enable.
Setty said financial institutions will assess capital structures which could also include providng risk capital in the future.
"Our assessment is that the potential for these eight sectors is placed anywhere around Rs 100 lakh crores next five years. The debt capital required will be probably lower...we estimate around Rs 20 to Rs 22 lakh crore opportunity next five years...We would like to understand the risk involved in this and structure (it) in a manner that the risk is mitigated," Setty said.
He said banks like SBI have been able to fund projects in India so far largely due to sticky retail deposits, but with the financialization of the household savings, financial institutions will need to be brought in to participate in infrastructure projects.
"We also see that large corporates in India have sufficient cash balances. There are almost Rs 13 to Rs 14 lakh crore cash balances available. And they are looking for opportunities in the sunrise sectors. How do we bring that equity capital to be invested? These are all the structures which we will be working on," Setty said.
He said out of the Rs 14 lakh crore of infrastructure financing in India Rs 4.20 lakh crore is financed by SBI alone. Public sector entities dominate infrastructure financing in India but as this new platform stabilises private sector lenders and other foreign lenders will also be reached out to to join the platform.
The bank's centre called Chakra will serve as a knowledge-led platform to enable financing for next-generation, technology-driven and sustainability-focused sunrise sectors. SBI will focus directing capital flows to these sectors, strengthening risk assessment capabilities in the financial sector and developing innovative financing structures aligned with evolving business models.
SBI has partnered with two dozen institutions including the World Bank, Japanese lenders MUFG and SMBC, all public sector banks, academic institutions and think tanks to finance the needs of these which are estimated to be about Rs 20 to Rs 22 lakh crore in the next five years.
"These are sectors which have huge manufacturing potential in India and also have unique risks while assessing these projects. We would like to build the capacity in the system both in terms of the financial world capability as well as industry policy advocacy," SBI chairman CS Setty said.
Financial services secretary M Nagaraju said by 2030, these eight sunrise sectors are expected to entail capital investment of over Rs 100 lakh crore which the central government will enable.
Setty said financial institutions will assess capital structures which could also include providng risk capital in the future.
"Our assessment is that the potential for these eight sectors is placed anywhere around Rs 100 lakh crores next five years. The debt capital required will be probably lower...we estimate around Rs 20 to Rs 22 lakh crore opportunity next five years...We would like to understand the risk involved in this and structure (it) in a manner that the risk is mitigated," Setty said.
He said banks like SBI have been able to fund projects in India so far largely due to sticky retail deposits, but with the financialization of the household savings, financial institutions will need to be brought in to participate in infrastructure projects.
"We also see that large corporates in India have sufficient cash balances. There are almost Rs 13 to Rs 14 lakh crore cash balances available. And they are looking for opportunities in the sunrise sectors. How do we bring that equity capital to be invested? These are all the structures which we will be working on," Setty said.
He said out of the Rs 14 lakh crore of infrastructure financing in India Rs 4.20 lakh crore is financed by SBI alone. Public sector entities dominate infrastructure financing in India but as this new platform stabilises private sector lenders and other foreign lenders will also be reached out to to join the platform.
