Indian govt’s Rs 1500 cr equity push to renewable energy sector

at 6:32 pm
File photo of Union Cabinet meeting

New Delhi: In a major push to the country’s clean energy programme, the government of India today announced equity infusion of Rs 1,500 crore in Indian Renewable Energy Development Agency Limited (IREDA).

This equity infusion will help in CO2 equivalent emission reduction of approximately 7.49 Million Tonnes CO2/year and employment generation of approximately 10,200 jobs a year, according to an official government spokesman.

IREDA, a 35-year-old mini ratna (Category-1) company under the administrative control of Ministry of Renewable Energy (MNRE), works as a specialised non-banking finance agency for the Renewable Energy (RE) sector.

With techno-commercial expertise, IREDA plays a catalytic role in the RE project financing which gives confidence to the FIs/banks to lend in the sector.

The equity infusion was approved by the Union Cabinet Committee on Economic Affairs, chaired by Prime Minister, the spokesman said.

The additional equity infusion of Rs.1500 crore by the Government of India will enable IREDA to lend Rs.12000 crore approximately to the RE sector, thus facilitating the debt requirement of RE of additional capacity of approximately 3500-4000 MW.

It will also enhance its net worth which will help it in additional RE financing, thus contributing better to the Government of India targets for RE.

The infusion will also help improve IREDA’s capital-to-risk weighted assets ratio (CRAR) to facilitate its lending and borrowing operations.