European long-term lending institution European Investment Bank (EIB) and Indian Renewable Energy Development Agency (IREDA) Ltd, the financing arm of the ministry of new and renewable energy, have signed a loan agreement for a second line of credit (LoC) of €150 million on non-sovereign basis.
The line of credit is for a tenure of 15 years including a grace period of three years, and it will be used for financing Renewable Energy and Energy Efficiency projects in India.
Over 1.1 million households are expected to benefit from clean energy produced through the utilisation of these funds.
R K Singh, union minister of state power, and new and renewable energy, said, ''There are villages in Ladakh and Arunachal Pradesh where you trek on foot for three to four days to reach. Our aim is to bring electricity to even these remote places…. We have decided to go green, as we have a responsibility to future generations and the planet.''
Highlighting that renewable energy has now become economically viable, he said that companies bidding for RE projects are getting funds from all over the world.
"Today, many countries want us to share our experience in this field,'' Singh said.
Anand Kumar, secretary, MNRE said that two factors - efficient technology and easy finance, are important for the success of the renewable energy sector. He expressed confidence that India would exceed its target of 175 GW renewable energy by 2022.
Acording to K S Popli, chairman and manging director, IREDA, the speed with which the second line of credit was negotiated shows the mutual confidence and comfort that EIB and IREDA had developed after working with each other for last four years.
Moreover, the EIB has extended this line of credit without insisting for sovereign guarantee from government of India, which also shows their commitment and confidence in the sector, he added.
India's role in International Solar Alliance and its commitment to the Paris Climate Accord has been appreciated, said W hoyer, president, EIB . He said that with much sunlight, solar energy is evidently a solution here.
IREDA has been spearheading the growth of renewable energy in the country for over three decades. It has financed renewable and energy efficiency projects valued at over over Rs34,534.06 crore till date.
To meet the financing requirement of renewable energy projects in the country, IREDA has been raising resources from various bilateral and multilateral agencies, Masala bonds, and domestic - taxable and tax-free bonds