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Technology & Quality Upgradation (TEQUP) Support to MSMEs


Technology & Quality Upgradation (TEQUP) Support to MSMEs 

The Small Industries Development Bank of India (SIDBI) is one of the financial institutions which promotes Small, Micro and Medium Enterprises (MSMEs)  with various schemes. One among the scheme is Technology & Quality Upgradation Support to MSMEs which aims to enhance the competitiveness of the MSME sector through the implementation of Energy Efficiency projects.

To know about SIDBI Venture Capital

Objectives of the Scheme

The following are the various objectives of the scheme:

  • To provide financial help in the form of subsidy to the extent of 25% of the total project cost for the implementation of Energy Efficient Technology (EET). The maximum amount of subsidy is Rs. 10 Lakhs for the project that holds the cost of Rs. 40 Lakhs. This activity is implemented through various nodal banks.
  • SIDBI is the Nodal Agency under the scheme. Besides, Canara Bank, Bank of Baroda, Punjab National Bank, Bank of India and State Bank of India have also been included as Nodal Banks.
  • To provide subsidy to enterprises to the extent of 75% of the actual expenditure incurred by them for obtaining the Product Certification Licences. The maximum GoI assistance allowed per MSME unit is Rs. 1.5 lakhs for obtaining licences/marking to national standards and Rs. 2 lakhs for the obtaining international Certification.
  • To sensitize the MSME Sector through conducting Awareness Programmes to adopt Energy-Efficient Technologies and acquire Product Certification/Licenses from National/International Bodies.

Documents Required

The below following are the documents to be submitted while applying for the scheme:

  • Identity Proof: Aadhar, PAN Card, Driving License, Voter Identity Card, etc.
  • Address Proof: Aadhar Card, PAN Card, Valid Passport, Utility bill, Property tax bill, etc.
  • EET project completion certificate
  • Operation and performance reports/details
  • Any other document required by the bank

Eligibility Criteria

  • Any MSME who has filed a UAM (Udyog Aadhaar Memorandum) registration will be eligible for the support under this scheme.
  • The Detailed Project Report (DPR) has to be prepared and submitted by a Qualified Energy Manager or Auditor.
  • The installed EET machinery must have a minimum of 15% energy saving capacity, and the energy audit report also to be submitted (stating minimum of 15% energy saving capacity) at the time of submission of the subsidy application form.
  • The Government assistance to be used for the specified purpose. Subsidy not to be adjusted against defaults in repayments by the borrower.
  • If the subsidy is claimed based on the false information, then to refund along with the panel interest.

The below-listed entities are the eligible borrowers under this scheme:

Note: If the unit becomes non-operational within 2 years of the Government receipt of financial assistance, then the unit is liable to refund the money. Additionally, the industry will need to refund the financial assistance along with interest.

Application Procedure

The applicant must follow the below procedure to apply for the scheme in SIDBI:

Step 1: The applicant has to apply for the sanction of loan for the project in SIDBI, banks or any financial institutions.

Step 2: After an appraisal of the Project from the applied institutions, the applicant will need to submit the loan application.

Step 3: In case if the loan application has not been submitted through SIDBI, then two copies of the application will be forwarded by the concerned Bank or Institution to SIDBI along with the proof of loan sanction letter and project viability report.

Step 4: SIDBI will submit the proposals to the Steering Committee for further approval. The Steering Committee will convey the decision to SIDBI with a copy to the applicant MSME for necessary action.

Step 5: Finally, after the loan sanction, the applicant will need to sign an agreement with the Bank or Institution sanctioning the loan in the prescribed format.