CER stands for one tonne equivalent of carbon dioxide reduction and can be traded.  In effect, users of solar water heaters will be able to encash the lower emissions through energy saved when entities from any of the 37 developed countries that buy carbon credits from developing nations, including India, to reduce their emissions of six harmful green-house gases.  The bank will provide loans to buy solar water heaters at concessional interest rates to individuals at 2 per cent per annum. For institutional users such as colleges and hostels, the interest will be 3 per cent and for commercial and industrial users, including small and medium enterprises, it will be 5 per cent.  The bank will facilitate collection and aggregation of users of solar water heaters and form an agency or body that will negotiate with foreign buyers of carbon credits from India.

Talks on
“We are in talks with the United Nations Environment Programme (UNEP) to get technical assistance for a mechanism to bundle this and tag it on to the Clean Development Mechanism projects. Revenue from the sale of carbon credits can flow to the bank, which in turn will be passed on to the users of solar water heaters.  This creates an additional stream of benefits/incentives to the users,” General Manager in-charge of Priority Sector Lending, Canara Bank, R. Prabha said.

The bank has proposed to the UNEP that a body can negotiate with buyers of carbon credits on behalf of users of the heaters.  As part of the bank’s ‘basket of green loan products’ to popularize use of renewable energy, finance will be given to buy heaters up to 85 per cent of the project cost, including cost of accessories and installation with no upper ceiling.

After a repayment holiday of 3 months, the loan can be repaid in 36 to 60 equate monthly installments or quarterly installments or depending up on the cash flows of the borrower.  “In the first year, the bank proposes to finance loans worth Rs.50 crores, saving energy to the extent of 12-15 MW,” he said.