The Asian Development Bank (ADB) will provide the Indian Renewable Energy Development Agency (IREDA) with a US$200 million loan as part of IREDA's plan to add 990MW of renewable energy capacity in India.
This loan is the first tranche of a US$500 million multi-tranche financing facility (MFF) to IREDA for its Clean Energy Finance Investment Programme, which aims to leverage public sector resources to encourage private sector investment in renewable energy projects including solar, wind, biomass, hydropower and cogeneration technologies.
The programme is expected to leverage around US$300 million in equity and other investments from subproject sponsors, and at least US$200 million of additional debt funds from unrestricted sources for a total investment programme of around US$1 billion. This will account for around 990MW of additional renewable energy capacity.
The ADB funding will account for part of the long-term credit, which IREDA requires for its renewable energy development target.
Teresa Kho, country director for ADB in India, 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.”
S. Selvakumar, joint secretary, department of economic affairs, Ministry of Finance, 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 programme will help meet this requirement by providing long-term funds for these subprojects.”