European Investment Bank (EIB) and Indian Renewable Energy Development Agency (IREDA) Ltd. have signed a loan agreement for a second line of credit (LoC) of Euro 150 million on non-sovereign basis in New Delhi on March 10.
- The line of credit is for tenure of 15 years including a grace period of 3 years, and it will be used for financing Renewable Energy and Energy Efficiency projects in India. More than 1.1 million households are expected to benefit from clean energy produced with these funds.
- India has set the target of 175 GW renewable energy by 2022.
- The EIB has extended this line of credit without insisting for sovereign guarantee from Government of India, which also shows their commitment and confidence in the sector.
About EIB
- European Investment Bank was Founded in Brussels in 1958 as the Treaty of Rome comes into force. Later it moved to Luxembourg in 1968.
- It is the long-term lending institution of the European Union owned by its Member States.
- It works closely with other EU institutions to implement EU policy and is also engaged in multilateral financing. More than 90 per cent of its activity is in Europe but it is also a big investor globally.
- EIB’s activities focus on four priority areas including innovation and skills, access to finance for smaller businesses, infrastructure and climate & environment.
About IREDA
- Indian Renewable Energy Development Agency Limited (IREDA) is a Mini Ratna (Category – I) Government of India Enterprise under the administrative control of Ministry of New and Renewable Energy (MNRE).
- IREDA is a Public Limited Government Company established as a Non-Banking Financial Institution in 1987 engaged in promoting, developing and extending financial assistance for setting up projects relating to new and renewable sources of energy and energy efficiency/conservation with the motto: “ENERGY FOR EVER”
- IREDA has been notified as a “Public Financial Institution” under section 4 ‘A’ of the Companies Act, 1956 and registered as Non-Banking Financial Company (NFBC) with Reserve Bank of India (RBI).
- It has financed renewable and energy efficiency projects of financial value of over Rs.34,534.06 crore till date.
- To meet the financing requirement of renewable energy projects in the country, IREDA has been raising resources from various bilateral and multilateral agencies, Masala bonds, and domestic – taxable and tax-free bonds.
