The Indian Renewable Energy Development Agency (IREDA) has launched its retail division with an emphasis on providing loans in the Business-to-Consumer (B2C) sector.

The strategic initiative targets borrowers under the PM-KUSUM program, rooftop solar consumers, and other B2C segments.

Pradip Kumar Das, Chairman and Managing Director, IREDA, announced the launch of the retail division, which became operational on December 5, at the Leaders’ Dialogue on “Actioning Solutions for Global Sustainable Development and Governance of Resources” as part of the ongoing COP28 Global Climate Summit in Dubai.

Shortly after the launch, IREDA approved its first loan amounting to ₹580 million (~$6.95 million) under Component B of the KUSUM program, underscoring its aim to emerge as the preferred lender in new segments, mirroring its success in other renewable energy sectors.

The Pradhan Mantri Pradhan Mantri Kisan Urja Suraksha evam Utthan Mahabhiyan (PM-KUSUM) program for the solarization of agricultural pumps has benefitted over 200,000 farmers as of February 28 this year.

Solar capacity of 89.45 MW has been installed under Component-A of the program. Approximately 209,000 pumps have been reported as installed or solarized under Component-B and Component-C.

In February this year, the Ministry of New and Renewable Energy (MNRE) granted a final extension to solar projects pending installation under Component A of the program to September 30, 2023, citing the difficulties faced by farmers in accessing finance during the initial phase.

Small consumers like MSMEs who opt for rooftop solar often face challenges in accessing collateral-free loans from lenders who do not perceive such projects as profitable. IREDA’s retail loan program could fill this gap.

India installed over 1.3 GW of rooftop solar capacity in the first nine months of the calendar year 2023, an increase of 12% year-over-year, according to Mercom India Research’s Q3 2023 Mercom India Rooftop Solar Market Report.

Das also proposed a big stride towards sustainable investing by suggesting a 1-2% Assets Under Management allocation for domestic pension and insurance funds into renewable energy bonds. This could deepen bond markets, fostering increased global and local investments, he said.