Promotion of renewable energies and energy efficiency through IREDA
As the strong demand for renewable energy financing is expected to continue in future, it was agreed in the Indo-German government negotiations in 2012 to deepen the successful cooperation between KfW and IREDA.
The first line of credit was established to improve the opportunities for the long-term financing of investments in renewable energy sources. This loan was used for the refinancing of twenty six wind energy projects (94 MW), three bagasse-based cogeneration projects (53 MW) and five solar photovoltaic plants (169 KWp) for which IREDA created target-oriented financing opportunities. The second line of credit to IREDA improved financing opportunities for small hydro projects and energy efficiency projects in the industry and building sector. These loan funds were utilized to promote two bagasse-based cogeneration plants (47 MW) and two small hydro power projects (29 MW).
Under the third line of credit, which promoted innovative projects of biomass combustion, gasification, methanation and cogeneration for electricity generation, five “Model Implementation Projects” were competitively chosen and financed to demonstrate models of how technological, institutional and financial barriers can be overcome. KfW’s fourth line of credit is dedicated to the promotion of new renewable energy and aims to promote innovative renewable energy business models, involving either new technologies, financing mechanisms or institutional arrangements across a variety of renewable energy sources – solar, wind, biomass and cogeneration as well as small hydro. Under this latest and on-going line of credit, five biomass and cogeneration projects (95 MW), four small hydro projects (55 MW) and six photovoltaic projects (15 MW) have been supported up to now.
The above financial assistance to IREDA has been accompanied by a total grant component of 1.5 million EUR for technical assistance. These measures shall inter alia improve IREDA’s risk management and strengthen the capacity of IREDA staff in the field of solar project financing and environmental and social appraisals.
As the strong demand for renewable energy financing is expected to continue in future, it was agreed in the Indo-German government negotiations in 2012 to deepen the successful cooperation between KfW and IREDA. The Indian and German governments agreed to commit another line of credit in the amount of 100 million EUR to be utilized by IREDA. Specific priority areas of financing under this programme are yet to be determined.