Indian Renewable Energy Development Agency (IREDA), established in 1987 as a Public Limited Government Company, under the administrative control of MNRE, is a specialized developmental financial institution with the objective to provide financial support to specific projects and schemes for generating electricity and/or energy through new and renewable sources and conserving energy through energy efficiency.
It offers term loans to renewable energy projects at rates slightly more favorable than general commercial lending rates.
As of March 31, 2010, IREDA financed 1,921 projects with a loan commitment amounts totaling over Rs.121.8 billion.
Other government agencies that actively fund renewable energy projects are the Power Finance Cooperation (PFC), the Rural Electrification Corporation (REC), and National Bank for Agricultural and Rural Development (NABARD).
Corporate financiers of renewable energy projects in India are primarily concentrated on the large wind and hydropower projects, where captive power generation and the application of accelerated depreciation benefits play a significant role.
According to the Ministry of New and Renewable Energy, of late, the growing awareness and favorable government policies & regulatory mechanisms (both at Central & State level) have led to gradual increase in confidence of domestic commercial banks providing loans to renewable energy projects.
A number of microfinance institutions (MFIs) facilitate the purchase of renewable energy systems like solar cookers, solar lanterns, or small biogas plants in off-grid areas of the country.
Just yesterday, Panchabuta had talked about the Indian Renewable Energy Development Agency (IREDA) being close to signing agreements with two international lenders that will provide it a Rs. 28.5 billion credit line for promoting development of sustainable energy in the country including mainly solar. The IREDA is expected to sign an agreement with Germany’s Kfw Bank in February that will provide it soft loans of Rs. 12 billion. In March, the agency is likely to enter into an arrangement with Japan International Cooperation Agency for soft loans of 16.5 billion.
As Panchabuta had earlier reported, France has agreeded to provide Euro 70 million soft loan to Indian Renewable Energy Development Agency (IREDA) for development of renewable energy in India.
Also as we had earlier mentioned, Japan Bank for International Cooperation was planning to provide upto $2 bn equity funding for private sector projects in India including Renewable Energy and had announced plans to create Green Fund for India with other sponsors.