Union cabinet approves infusion of Rs 1,500 Crore in Indian Renewable Energy Development Agency

This equity infusion of Rs. 1,500 crore will help in the generation of employment, about 10,200 jobs-year as well as carbon dioxide equivalent emission reduction of nearly 7.49 Million Tonnes CO2 per year.

The government on Wednesday approved the equity infusion of Rs 1,500 crore in Indian Renewable Energy Development Agency (IREDA) to enable it to lend Rs 12,000 crore to green energy projects.

IREDA, a mini ratna company under the administrative control of the new and renewable energy ministry was set up in 1987 to work as a specialised non-banking finance agency for the renewable energy sector.

“This equity infusion will help in employment generation of approximately 10,200 jobs-year and CO2 equivalent emission reduction of approximately 7.49 million monnes CO2 per year,” the Ministry of New and Renewable Energy (MNRE) said in a release on Wednesday (19 January).

Briefing reporters after the Cabinet meeting, Information and Broadcasting Minister Anurag Thakur said the decision has been taken in the wake of Reserve Bank of India’s (RBI) lending norms.

“This agency was established to finance renewable energy. Its portfolio has increased from Rs 8,800 crore to Rs 28,000 crore in the past 6 years,” Thakur said

“But according to RBI, the loan can only be lent on 20 per cent of the net worth. The net worth of IREDA is Rs 3,000 crore. It can lend loans up to Rs 600 crore only,” the Union Minister added.

Further, the Union Cabinet also approved scheme for grant of ex-gratia payment of difference between compound interest and simple interest for six months to borrowers in specified loan accounts. 

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