The European Investment Bank (EIB) and the Indian Renewable Energy Development Agency (IREDA) have inked an agreement worth €150 million (~$184.81 million) to further the growth of renewable energy generation in the country.

IREDA is the dedicated financing arm of the Ministry of New and Renewable Energy (MNRE) for financing renewable and energy efficiency projects in the country. EIB is the long-term lending institution of the European Union owned by its member states.

The line of credit provided under the agreement is for a period of 15 years, which includes a grace period of three years. This line of credit will be used for financing green energy projects in India. According to a statement issued by the government, the generated funds will benefit over 1.1 million households across the country.

In October 2017, Mercom had reported that EIB had announced extending a sum of €800 million (~$984 million) in funding for renewable energy investment across India. This included renewable energy financing in partnership with IREDA and the India Infrastructure Finance Company (IIFCL).

Recently, Mercom also reported that YES Bank, one of the largest private sector banks in India, has collaborated with EIB to formulate a renewable energy financing program for India.

Speaking about India’s journey to electrify every single village, the minister of power, R.K. Singh said, “There are villages in Ladakh and Arunachal Pradesh where you track on foot for three to four days to reach. Our aim is to bring electricity to even these remote places. We have decided to go green, as we have a responsibility to future generations and the planet.”

Highlighting how clean energy has now become economically viable, Singh said that companies bidding for renewable projects are now getting funds from all over the world. “Today, many countries want us to share our experience in this field,” Singh added.

K.S. Popli, the chairman and managing director of IREDA said that the speed with which the second line of credit was negotiated shows the mutual confidence and comfort that EIB and IREDA had developed after working with each other for the last four years. Moreover, the EIB has extended this line of credit without insisting for sovereign guarantee from the Government of India, which also shows their commitment and confidence in the sector,he added.

W. Hoyer, President, EIB appreciated India’s role in International Solar Alliance (ISA) and its commitment to Paris climate deal. He said that with much sunlight, solar energy is evidently a solution here.

In February 2018, IREDA received a green signal from the Securities and Exchange Board of India (SEBI) for the launch of its Initial Public Offering (IPO). IREDA had aplanned to issue 139 million equity shares as part of IPO. As reported previously by Mercom, this IPO will help IREDA increase its equity base by creating a larger debt resource for lending.

Moreover, IREDA recently entered a $35 million sub-loan agreement with the Rewa Ultra Mega Solar (RUMSL) for the development of the Rewa and Mandsaur solar projects in the state of Madhya Pradesh.