Empowering Sri Lankan SMEs through energy efficiency

Initiative of the Sri Lankan-German SME Development Program to reach 600 SMEs

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Five strong partners have joined hands to empower Sri Lankan Small and Medium-sized Enterprises (SMEs). “Reduced energy costs and awareness on energy efficiency will increase the competitiveness of up to 600 participating SMEs,” explained Sri Lankan-German SME Development Program Senior Advisor German Müller. 

Deutsche Gesellschaftfür Internationale Zusammenarbeit (GIZ) GmbH initiated the project titled ‘Financing Energy Efficiency for SMEs’. The objective is to help SMEs reduce their production cost through energy efficiency measures. For this purpose, SMEs get support to develop realistic project proposals – and are brought a step closer to appropriate funding. 

Sri Lankan partners in this endeavour are DFCC Bank, Hatton National Bank, the Sri Lanka Energy Managers’ Association (SLEMA) as well as regional chambers of commerce, coordinated through the Ceylon Chamber of Commerce (CCC). Two international consultancy companies from Germany, arqum and adelphi, support implementation of the project. 

“With high energy prices in Sri Lanka, there is a strong business case for energy efficient investments in Sri Lanka, which in turn will increase awareness on the innovation potential that comes with green technology,” said Sri Lanka Energy Managers’ Association (SLEMA) President Nimal Perera. 

Experts of SLEMA, seconded by their German colleagues, will advise SMEs how to reap the benefits of green technologies and how to adapt them to their specific needs. 

Through an earlier program of the Sri Lankan-German SME Development Program, 30 SMEs were trained to implement Energy Efficient/Renewable Energy (EE/RE) measures. The companies involved were able to reduce their energy cost by 20 to 50%, with low-investive measures only. 

Because entrepreneurs cited lack of sufficient and acceptable credit as the main barrier to implementing the EE/RE projects, two major banks are now involved from the start in ‘Financing Energy Efficiency for SMEs’. DFCC and HNB respectively will sponsor training workshops for 300 SMEs each. Thus 600 SMEs will benefit island wide, with a focus on Northern and Eastern Provinces. The first workshops will be held in Anuradhapura, Jaffna, Batticaloa and Matara in the second half of July. 

The banks and the Sri Lankan and international experts will follow an integrated approach to ensure necessary support for SMEs at each step of the investment process. In addition, bank staff will be capacitated, too, in order to establish industry benchmarks and adjust procedures to be able to better serve the SME sector.

“DFCC being the premier development bank in the country has always had special focus on energy efficiency and renewable energy having pioneered financing of mini hydro, wind and village hydro projects in the country. With this venture we will be able to engage more actively with SMEs and other industry customers on energy savings potentials in the future,” said DFCC Bank PLC Branch Banking Senior Vice President Dharmasiri Wickramatilake. 

“This program comes at the right time, as it will strengthen our position as a leading bank, linking cutting edge international expertise to the needs of our customers in the regions,” said Hatton National Bank SME Manager Senaka Wijekoon. 

Training for experts of the Sri Lankan Energy Managers Association on conducting energy audits for SMEs will also be part of the program.

Finally, regional chambers will play a multiplier role in helping to reach enterprises not served by partner banks. “Sri Lankan energy prices being high, compared to its regional counterparts, adopting energy efficiency measures would help sustaining competitiveness and re-positioning the Sri Lankan SME sector in the global market. SME sector being the backbone of the national economy and the reduction in fossil fuel consumption would immensely help the national economy,” said Ceylon Chamber of Commerce Secretary General/CEO Mangala Yapa.