India secures a €200 million EIB loan to expand its clean energy projects
- 24 February 2014
NEW DELHI: The Indian Renewable Energy Development Agency (IREDA) has just secured €200 million (US$274 million) in credit from the European Investment Bank (EIB), in a new collaboration that will help provide India with the fuel to lead Asia's Clean Revolution.
The new EIB loan will facilitate the development and expansion of renewable energy projects in India over the next 20 years.
IREDA - the institution within the Ministry of New and Renewable Energy which is responsible for providing loans for new clean energy projects – has to date financed over 2,000 projects worth about 22,500 crore (over US$3.6 billion).
The European Investment Bank first collaborated with India in 1993, but this loan represents the Bank's first lending operation with IREDA in particular. The Indian Agency will reimburse the loan in a number of instalments over the next 20 years.
Under the new EIB loan, IREDA will be able to extend existing long term loans to renewable energy projects, as well as provide fresh support to new clean power initiatives.
Ambassador of the European Union to India, Dr João Cravinho, commenting on the new long term loan, remarked: “This agreement significantly strengthens an important dimension of our relationship with India, and it opens up new perspectives for cooperation between the EU and India in a sector that is of great interest for both. The private sector is the global engine of growth and the primary source of new investments and the EU is committed to encouraging such investments in India.”
The news of this credit comes just weeks after the Indian Government announced plans to build the world’s largest solar plant, a project which would benefit from this new funding. The Ministry of New and Renewable Energy believes that the first phase of construction of the plant will cost approximately US$1.08 billion. When complete the solar plant could generate 4 gigawatts of power capacity.
Solar power is a burgeoning industry in India with new data highlighting that 2013 cumulative solar capacity was almost double that of 2012. However, currently 40% of India is still not connected to the grid.
But with a concerted prioritization of renewable energy the number of off-grid regions in India could be significantly reduced.
One such effort is The Climate Group's program Bijli – Clean Energy for All, which aims to reduce greenhouse gas emissions and improve lives in rural India by fostering renewable energy initiatives to connect off-grid communities. Find out more.
By Alana Ryan