India gets $276 million loan from EU to boost renewables
- 02 April 2014
NEW DELHI: The EU's bank has granted a €200 million (US$276.2 million) loan to India Infrastructure Finance Company Ltd (IIFCL), to help fund projects that aim to boost renewable energy and tackle climate change.
The European Union's nonprofit long-term lending institution the European Investment Bank (EIB), gave IIFCL the Framework Loan to make long-term finance available for investments in sectors that slash emissions, such as renewable energy and energy efficiency projects.
In a statement today, the European Commission said IIFCL, a government entity that promotes Indian infrastructure investments, will be able to use the funds for on-lending to private companies, for small, medium-sized and some large projects.
The Framework Loan will also support the EU-India Strategic Partnership, which aims to develop renewable energy and the efficient use of energy to address climate change, as well as meet fast-growing energy demand.
With an aging energy infrastructure that struggles to keep up with its booming population--200 million people are expected to enter India's ‘middle class’ bracket by 2020--the country suffers from regular power blackouts.
On top of this, over 400 million people in rural India are not yet connected to the grid.
Because around 60% of India’s electricity comes from coal, boosting home-grown renewables through investment such as the EIB loan, could offer increased energy access for poorer, off-grid communities, as well as improve the reliability of the emerging economy’s much-needed supply.
Commenting on the promising prospects for India's renewables market ahead of next month's elections, Krishnan Pallassana, India Director, The Climate Group, said: “Renewable energy is the best bet towards ushering equitable opportunities to millions of rural people to come out of poverty. Our recent work in Gujarat, Maharashtra and West Bengal has demonstrated that clean and renewable energy is viable, equitable and accessible."
Image by Jiri Rezac
By Clare Saxon