According to reports, with traditional power sector hamstrung by fuel shortage and climate change getting top billing at World Economic Forum summit in Davos, the government has lined up a Rs 5,000-crore, or $800 million, push to promote green energy capacity. The ministry of new and renewable energy proposes to raise the authorized share capital of Ireda ( Indian Renewable Energy Development Agency) from Rs 1,000 crore at present to Rs 6,000 crore through this infusion.
The proposal envisages the government pumping in Rs 2,500 crore, while the remaining funds are to be raised through rights issue and initial public offering of Ireda shares. The government funding would be concurrent to the IPO and rights issue. The ministry’s move gains a wider significance in the backdrop of global business leaders and policymakers at the ongoing WEF summit, asking for a shift to cleaner energy sources as the best way to contain global warming and re-energize the global economy.
Agency reports on Thursday quoted UN climate chief Christiana Figueres as saying , the world economy is at risk unless a binding deal is agreed in Paris next year to reduce heat-trapping carbon emissions from fossil fuels. Ireda was set up in 1987 as a 100% government funding agency for renewable energy sources such as solar, wind and small hdro power projects. Its authorized share capital was last raised by Rs 600 crore to Rs 1000 crore in 2006-07. Against this authorized capital, the agency has a paid-up share capital of over Rs 744 crore.The ministry has proposed the funding to be done within a month of Cabinet approving the proposal. The Cabinet is expected to take up the proposal shortly. The ministry has set a target of adding 30,000 mw of green capacity by 2017. A higher authorized capital for Ireda, it has argued, would help the agency to leverage the enhanced equity to raise money at home and abroad to meet its funding target.
Ireda is aiming to provide loans for about 4,800 mw renewable energy projects in the 2012-17 Plan period. The agency would have to mobilize financing resources of Rs 14,000 crore. During the 11th Plan period, it had raised Rs 3,690 crore from banks as well as through bonds and international line of credit.