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GIZ, HNB and DFCC continue to reach out to hundreds of Sri Lankan SMEs through training on efficient use of energy and energy audits, helping entrepreneurs bring down their energy costs, making them more competitive and contributing to a greener Sri Lanka.
In October alone, more than 240 SMEs were trained in Gampaha, Kurunegala, Polonnaruwa, Badulla, Ratnapura, Galle, Tissamaharama and Kandy. Participants were owners and managers of hotels and guest houses, hospitals, textile, tea factories, ice factories, rice mills, poultry farms or garages. They learned how to increase energy efficiency of their operations with regards to cooling, heating, lighting, air-condition, motors, drives and pumps. Tools for cost-benefit analysis, increasing employee awareness and assessing the financial viability of potential investments were also introduced.
In addition, companies received practical on-site support. The first batch of energy efficiency audits were performed in Jaffna. Sri Lankan and German energy experts visited company premises and gave valuable advice to improve energy usage.
“Energy audits like these have thus far been confined to major companies. This is the first time SMEs, especially from the North and East have benefited with expert advice on energy efficiency. We are glad to be facilitating this endeavour of enabling SMEs, especially in Northern and Eastern Province, to be more competitive,” said German Müller, Senior Advisor SME Development at GIZ Sri Lanka.
The initiative, titled “Financing Energy Efficiency for Sri Lankan SMEs”, has four strong local partners collaborating with GIZ: DFCC Bank, Hatton National Bank, the Ceylon Chamber of Commerce (CCC) and the Sri Lanka Energy Managers Association. Two renowned consultancy companies from Germany, Arqum and Adelphi, support implementation of the project.
The Sri Lankan-German team conducting the energy efficiency audits in Jaffna was led by German energy expert Martin Wohlmuth of Arqum. He also trained professionals of SLEMA on latest international best practices in auditing energy efficiency.
“We learned a lot through the interactions, and gained confidence by performing practical energy audits in collaboration with the international experts on this project, especially on gearing our audits to SMEs,” said Noel Fonseka, a senior member of SLEMA who participated in the Jaffna audits.
In addition to facilitating SLEMA professionals to be updated on the latest in global energy efficiency technology, the program also facilitated students from the University of Jaffna to interact and learn from the international exposure.
The SME entrepreneurs had already been given training via energy efficiency workshops on the need for inculcating energy efficiency in their institutions in order to reduce costs as well as get ahead competitively. The next step of the process was to conduct Energy Audits at selected SMEs. This way the entrepreneurs who underwent the training on energy efficiency could have a chance to learn directly how and where they could streamline their energy consumption in order to improve their businesses.
Typical SMEs of the North such as rice mills and printing businesses were the first to receive the audits. Lined up next are ice and garment factories, hospitals and other institutions which stand to gain much by incorporating energy efficiency in their systems. They report that they have already started implementing what they learned via the conferences facilitated for them.
Said a principal at a private school who had undergone the training: “We received a lot of useful and practical advice that we can immediately implement. I will pass this knowledge on to my team and students, and educate them about what each and every one can do to reduce our energy bill.”
At the audits of the SMEs in Jaffna, which included personal walk-through inspections of the premises, Martin Wohlmuth and his team found several areas which needed improvement. Poor insulation of pipes, installation of deficient or poorly performing electrical drives, and inefficient consumption of compression chillers were some of their routine findings.
“Some of these might take investments to reinstall or upgrade but we also often found instances for improvement where they just had to be more aware of cost effects,” said Martin. “Examples of these would be having machinery running even when they are not needed or having the air conditioning turned on unsustainably high. Managing regular maintenance of machines, ensuring they are cleaned and oiled regularly would also be an important factor to improve efficiency that we commonly came across as needing to be improved.”
At the end of the walk-through audits, the proprietors were given immediate feedback on the team’s findings as they were anxiously waiting for them. The findings were also further evaluated and analysed to be delivered in a comprehensive report format later.
“We included all the individually tailored improvements to suit each SME that we had identified at the audit as well as the costs involved in implementing our recommendations. Some of these recommendations involved zero costs and just better care. In those cases where investments were needed however, we also included feasibility reports on the costs involved due to the energy currently being lost versus the cost of implementing energy saving measures,” explained Martin Wohlmuth.
This was part of the rationale for DFCC and HNB banks joining as partners in the project. Because entrepreneurs cited lack of sufficient and acceptable credit as the main barrier to implementing Energy Efficiency and Renewable Energy measures, both DFCC and HNB have come forward and expressed willingness to extend loans to the SMEs at competitive rates, to improve their energy efficiency systems.
The banks and the Sri Lankan and international experts follow an integrated approach to ensure necessary support for SMEs at each step of the investment process. In addition, bank staff isbeing capacitated, in order to establish industry benchmarks and adjust procedures to be able to better serve the SME sector.
“There has been enthusiastic and interactive discussions taking place at these Energy Efficiency workshops and it is encouraging to note the importance that SMEs place on this critical cost component. DFCC being the premier development bank in the country is always happy to play a role in imparting cutting edge knowledge to its clientele which will eventually help elevate them to the next level,” said Rohantha Seneviratne, Head of Operations at DFCC Consulting.
“It is clear from the recently concluded trainings on that most of the SMEs are actively involved in exchanging their experience with the resource persons. This highlights the success of these workshops. HNB is a leading commercial bank having a branch network of over 250 branches and we cater to a large number of SME clients. We are proud to be a partner of this initiative which would benefit our customers in reducing costs and improving profitability,” said Senaka Wijekoon, Manager SME at HNB.
“Sri Lankan SMEs have high potential to improve on energy savings andefficiency so our focus has been on helping them achieve that potential,” said Martin Wohlmuth, the international energy expert who conducted the audits. He further noted that Sri Lanka as a whole needs to catch up regionally too. “Indian SMEs are slightly ahead of Sri Lanka in the Energy Efficiency Sector while China is way ahead. There is clearly a lot of room for improvement.”
The Sri Lankan-German SME Development Programme, implemented by GIZ in cooperation with Ministry of Finance, Sri Lanka, aims to support a cohesive policy framework enabling SMEs to grow in an inclusive and eco-friendly manner. Through a wide range of technical assistance, it helps enhance competitiveness of SMEs through technology transfer, innovation and improved access to finance. The programme is funded by the Federal Ministry for Economic Cooperation and Development (BMZ) of Germany.
Established in 1955, DFCC Bank PLC is the pioneer development finance institution in Sri Lanka, and has pioneered development in what are now established and vibrant sectors, such as apparel, ceramics, energy, hotels, telecommunications and renewable energy.
Hatton National Bank Plc (HNB) is one of the premier private commercial banks with the largest network of over 250 customer centres. HNB has identified the importance of the SME sector revealed through its contribution in the economic growth of the country by having a portfolio of Rs. 104 b by end of year 2014.
Sri Lanka Energy Managers Association (SLEMA) was founded in 1984 by a group of professionals, to promote efficiency and rational use of energy in Sri Lanka. In 1994, SLEMA was incorporated by an Act of Parliament.
The Ceylon Chamber of Commerce (CCC), founded in 1839, is the most senior Chamber in Sri Lanka. The Chamber is an autonomous, non-political, service organisation, set up to promote the interests of Sri Lanka’s business community.
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