RE I n s t I t u t I o n s

86 ❘ june 2013Volume 6 ❘ Issue 5 & 6

renewable energy FInancIngIREDA, since its inception has played a catalytic role in the commercialization of renewable energy in the country by providing innovative and customized financial services across the entire value chain, from manufacturing facilities to power generation and evacuation projects.

june 2013 ❘ 87Volume 6 ❘ Issue 5 & 6

market growth of the renewable energy sector. Some of these schemes included the ambitious 20,000 MW Jawaharlal Nehru National Solar Mission, Renewable Energy Certificate mechanism and the Wind-GBI programme. IREDA also participates in administration of many of the programmes of the Government.

Being a pioneering institution, IREDA is devising new and innovative financing schemes to suit the needs of the sector. Apart from offering term loans for setting up projects, IREDA offers tailor made instruments for financing of RE/EE manufacturing facilities and evacuation systems, securitization against future receivables, facilitating limited recourse financing under a structured repayment mode and financing large size projects under consortium/ cofinance.

Due to its impeccable credentials and high brand equity, multilateral and bilateral development agencies, like the

the Indian Renewable Energy Development Agency (IREDA) was established in 1987 as financial institution under the Ministry of New & Renewable Energy (MNRE), with a mandate to promote the commercial use of new and renewable technologies

by making available adequate financial resources for the sector. Since its inception, IREDA has played a catalytic role in the commercialization of Renewable Energy in the country by providing innovative and customized financial services across the entire value chain, from manufacturing facilities to power generation and evacuation projects.

IREDA has led the way in financing renewable energy projects by following a unique business model, wherein, it plays a catalytic role by creating and showcasing success stories in order to reduce the risk perception of other lending agencies like banks and financial institutions and encouraging them to finance such projects. The effectiveness of the business model followed by IREDA can be gauged from the fact that in spite of a global economic slowdown, IREDA achieved a growth rate of over 30 per cent CAGR in the last 5 years (2007-12).

In the 25 years of its existence, IREDA has financed more than 2000 projects across different technologies, like solar, wind, biomass, cogeneration, hydro and energy efficiency, with disbursements close to Rs. 9723.30 crore. This has led to setting up of about 2500 MW of clean power generating capacity in the country, resulting in abatement of over 5 million tons of CO2 green house gases (GHG) on an annual basis. IREDA has come a long way since its inception with profit after tax (PAT) of Rs. 0.10 crore (1987-88) to Rs. 173.13 crore (2011-12). The average growth rate of PAT is over 25 per cent in the last 5 years (2007-12).

Conducive policy environment is one of important prerequisites for growth and development of the renewable energy market. IREDA plays a critical role in providing feedback to the Government for formulating policy direction for healthy

operatIonal areas

wind

Hydro

biomass power

cogeneration

solar

waste to energy

energy efficiency

bio fuels/ alternate fuels

scHemes

project financing

equipment financing

Finance for equipment manufacturing

lendIng terms

loan - upto 70 per cent of project cost

repayment - upto 10 years

In tHe 25 years oF Its exIstence,

Ireda Has FInanced more tHan

2000 projects usIng dIFFerent tecHnologIes,

lIke solar, wInd, bIomass, cogeneratIon,

Hydro and energy eFFIcIency, wItH dIsbursements

close to rs. 9723.30 crore.

Loan sanctions (Rs. cr.)

0

1000

2000

3000

4000

2007-08 2008-09 2009-10 2010-11 2011-12

826.151489.93

1823.91

3126.423405.96

20001855.04

1224.17890.03

770.95553.64

1500

1000

500

0

2007-08 2008-09 2009-10 2010-11 2011-12

Loan disbursements (Rs. cr.)

88 ❘ june 2013Volume 6 ❘ Issue 5 & 6

World Bank, Asian Development Bank (ADB), German Development Agency (KfW), French Development Agency (AFD), Nordic Investment Bank (NIB) and the Japanese International Corporation Agency (JICA) have been supporting the endeavours of IREDA. It has sourced over 1300 million USD from these agencies, enabling availability of credit to the Indian project developers at competitive terms, leading to better viability of these ventures. Due to the quality of due-diligence, the ease of transaction and the transparency being followed at IREDA, many of these international agencies are offering newer and larger lines of credit.

To broad base the funding of the sector, IREDA participates in joint financing of projects along with commercial banks and financial institutions. This leads to creation of a multiplier effect as the participant institution feels confident to lend to this sector due to IREDA’s inherent strengths in assessment of RE projects. True

HIgHlIgHts: 25 years oF operatIons

projects sanctioned :2017

loan commitments : rs. 18711.78 crore

loan disbursements : rs. 9723.30 crore

sanctioned capacity : 9,134 mw

commissioned capacity:2,436 mw

Hg mitigation : 5.5 mt co2eq.

new InItIatIVes

securitization against future receivables

structured repayment

consortium/ co-finance

non-recourse financing

till Fy 2011-12

to its role as a development institution, IREDA acts as a knowledge repository of the Indian renewable sector. The organization is playing an important role in capacity building of the stakeholders as required in this upcoming sector by way of sharing its experience through publications and dissemination of sector specific literature like best practices manuals, compendiums, sectoral reports and analysis etc. It also conducts workshops and seminars for awareness creation that encouraging investors. As a result, the renewable energy sector has been placed at the center-stage while planning for the energy policy of the country.

IREDA has been playing the role of a true market leader in the area of renewable energy financing, acting as a market catalyst to drive higher investments into this sector, besides fulfilling its developmental role by creating awareness on renewable energy technologies. bInputs from R.K Vimal, General Manager, IREDA. Email- rkvimal@ireda.gov.in

Impact oF Ireda’s operatIons

pioneered re financing in India

encouraged entry of private sector

catalyzed FIs & banks to finance re

developed innovative financing

worked towards conducive policies

sourced low-cost funds

200

150

100

50

0

47.96 56.2172.69

120.46

173.13

2007-08 2008-09 2009-10 2010-11 2011-12

Profit after tax (Rs. crore)

IREDA has received global recognition and numerous accolades for its pioneering work in catalyzing greenfinancing in India. To name a few, it has received the Wind India Award, Water Globe Award, the Indian PowerAward and the Green Innovators Award.

Multilateral and bilateral development agencies

IREDA’s Publications

r e n e wa b l e e n e r g y F I n a n c I n g