IREDA inks MoU with Bank of India

The Indian Renewable Energy Development Agency Limited (IREDA) and the Bank of India (BoI) have signed a Memorandum of Understanding (MoU) for co-lending, co-origination, and loan syndication for renewable energy projects. The MoU will allow IREDA and BoI to collaborate on renewable energy projects such as small hydro and ethanol. Both organisations will also work to lock in interest rates for IREDA borrowings for three to four years.

IREDA is a mini ratna (Category – I) government of India enterprise that reports to the Ministry of New and Renewable Energy. It is a public limited government company that was founded in 1987 as a non-banking financial institution to promote, develop, and extend financial assistance for the establishment of projects relating to new and renewable energy sources and energy conservation.

In April 2022, IREDA approved a loan of Rs 2.67 billion to BluSmart Mobility for the purchase of 3,000 all-electric automobiles in the Delhi-NCR region. BluSmart Mobility will use the new funds to purchase 3,000 all-electric vehicles, allowing the company to expand its EV fleet. IREDA has disbursed the first tranche of Rs 357 million from the sanctioned loan of Rs 2.67 billion to the company.

In January 2022, the Cabinet Committee on Economic Affairs approved a Rs 15 billion equity infusion in IREDA. The equity infusion is expected to contribute to the creation of about 10,200 jobs per year and the reduction of approximately 7.49 million tonnes of carbon dioxide equivalent emissions per year.

The equity infusion into IREDA will allow it to: lend Rs 12 billion to the renewable energy sector, easing the debt requirement for additional capacity of around 3,500-4,000 MW; increase its net value, which will enable it to obtain further renewable energy finance and hence contribute more to the Indian government’s renewable energy targets; increase the capital-to-risk-weighted-assets ratio to enable lending and borrowing easier.

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