The ADB (Asian Development Bank) has signed a $200m loan agreement with Indian government for supporting Indian Renewable Energy Development Agency’s (IREDA) renewable energy subprojects.
The loan is the first part of IREDA’s $500m multitranche financing facility (MFF) of Clean Energy Finance Investment Program.
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The program will support public sector resources to generate private sector investments in renewable energy subprojects such as wind, biomass, hydropower, solar, and cogeneration technologies.
ADB India country director M Teresa Kho said: "ADB’s loan will help the government scale-up renewable energy infrastructure by facilitating investments in projects that will balance the objectives of growth, climate change, and energy security.
"ADB funds can be used to finance up to 50% of the subproject cost, and the first tranche loan will help IREDA debt finance around 10 or more renewable energy projects, depending on the individual project sizes."
IREDA falls under Ministry of New and Renewable Energy. The nonbank financial institution was established to promote renewable energy investment.
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By GlobalDataMinistry of Finance Department of Economic Affairs Joint Secretary (Bilateral Cooperation) S. Selvakumar said: "Lack of sufficient long-term debt financing for renewable energy projects in India is one of the major challenges to sustaining high levels of renewable energy deployment.
"This program will help meet this requirement by providing long-term funds for these subprojects."
IREDA expects to generate an estimated $300m in equity and other investments from subproject sponsors for the programme.
It also expects to add $200m of additional debt funds from unrestricted sources for a total investment program of around $1bn to produce around 990MW of additional renewable energy.
