IREDA Inks MoU with Bank of India for Co-Lending for RE Projects

To facilitate co-lending, co-origination, and loan syndication for renewable energy projects, The Bank of India (BoI) and the Indian Renewable Energy Development Agency Limited (IREDA) inks MoU (Memorandum of Understanding). IREDA is one of the earliest and largest renewables-focused financial institutions. The MoU will enable cooperation between IREDA and BoI on renewable energy initiatives including ethanol and small hydro. In addition, both organisations will attempt to lock in interest rates for IREDA borrowings for a period of three to four years.

IREDA is a government-owned mini-Ratna (Category-I) firm that answers to the Ministry of New and Renewable Energy. It was established in 1987 as a public limited government company to promote, develop, and provide financial support for the formation of projects connected to new and renewable energy sources and energy conservation.

A loan of Rs 267 crores from IREDA was given to BluSmart Mobility in April 2022 to buy 3,000 all-electric cars for the Delhi-NCR area. With the additional money, BluSmart Mobility will be able to increase the size of its EV fleet by purchasing 3,000 all-electric vehicles. From the sanctioned loan of Rs 267 crores, IREDA has paid the company the first installment of Rs 35.7 crores.

A Rs 1500 crores equity investment in IREDA was approved by the Cabinet Committee on Economic Affairs in January 2022. As a result of the equity investment, it is anticipated that 10,200 new employment will be created annually.

With the additional equity, IREDA will be able to lend Rs 1200 crores to the renewable energy industry, reducing the amount of debt needed to develop an additional 3,500–4,000 MW of capacity. This will enhance its net worth, enable it to secure more finance for renewable energy projects, help meet the Indian government’s renewable energy targets, and raise the capital-to-risk-weighted-assets ratio, making borrowing and lending easier.