The Union Cabinet, led by Prime Minister Narendra Modi has authorised a Rs 1,500 crore infusion into the Indian Renewable Energy Development Agency on Wednesday (IREDA).
The infusion will allow IREDA to grant Rs 12,000 crore to the renewable energy sector,” Union Minister Anurag Thakur stated in a cabinet briefing.
The decision has been made in the wake the Reserve Bank of India’s (RBI) latest lending norms. The Minister informed that this Cabinet decision will help IREDA to create a renewable energy capacity of 3,500 to 4,000 MW.
Boosting Employment & Financing in Renewable Sector
This equity infusion will help in the employment generation of approximately 10,200 jobs a year.
In addition to this, it will also usher CO2 equivalent emission reduction of approximately 7.49 million Tonnes CO2/year.
The government has set a target of the non-fossil energy capacity of 500 gigawatts (GW) by 2030 and Net-Zero by the year 2070.
Additional equity infusion of Rs.1500 crore by the Government of India will enable IREDA
1. To lend an additional Rs.12000 crore approximately to the RE sector, thus facilitating the debt requirement of RE of additional capacity of approximately 3500-4000 MW.
2. To enhance its networth which will help it in additional RE financing, thereby contributing better to the government’s targets for RE.
3. To improve the capital-to-risk weighted assets ratio (CRAR) to facilitate its lending and borrowing operations.
Despite the pandemic situation, IREDA has reported all-time high annual Profit Before Tax (PBT) of Rs. 570 crore rupees in FY 2020-21 and all-time high half-yearly Profit After Tax (PAT) of Rs. 299.90 crores in FY 2021-22,” CMD, IREDA, Pardip Kumar Das stated in an official release by IREDA.
Further, to meet the demand of sustainable alternatives towards mobility, the agency is already financing Compressed Biogas (CBG), Bio-Ethanol Production projects in order to further extend its mandate for financing the entire value chain of green mobility.
The agency is ensuring this under its “comprehensive policy for financing new technologies, promoting & increasing usage/penetration of Renewable Energy & Funding of green mobility segment.”
IREDA is a Mini-Ratna (Category-1) company working under the administrative control of MNRE. It was set up in 1987 to work as a specialised non-banking finance agency for the Renewable Energy (RE) sector. The agency has more than 34 years of techno-commercial expertise and plays a catalytic role in the RE project financing which gives confidence to the FIs/banks to lend in the sector.