IREDA plans to leverage around $100 million through this facility
The Indian Renewable Energy Development Agency (IREDA) is planning to set up a green window to fund renewable energy projects in India. Anand Kumar, Secretary of the Ministry of New and Renewable Energy (MNRE) has stated that the IREDA intends to set up the green fund to plug the funding gap in the Indian clean energy sector.
At the recently concluded UN Climate Change Conference (COP 25), Anand Kumar stated “Renewable energy is increasingly cheaper and better for the strategic interests of India, and the IREDA Green Window would provide a significant boost to the renewable energy market. As India moves towards becoming a USD 5 trillion economy, the country’s aim to install 450 GW of renewable energy capacity would be one of the major drivers of its economic growth.”
Green windows are financing options that streamline funding options in the clean technology sector. Green windows are like green banks, which are an internationally successful financing model in clean energy. A green window reduces the risk factor for banks to finance green projects. It also mobilizes funds from international sources to be routed into these projects.
IREDA has financed the highest number of renewable energy projects in India since its inception in 1987. Under this green window, the IREDA intends to fill the void in the renewable energy sector. All overlooked aspects of the sector will be brought into the fold through this initiative. IREDA intends to mobilize approximately $100 million to enhance renewable energy projects in the country. The green window once established will act as an engine to reduce the risk factor in clean energy investments.
A fact sheet that clarified the timeline and an outline to establish the green window was released at (COP 25) in Madrid. Anand Kumar of MNRE; IREDA Chairman, Chintan Shah; and knowledge partners NRDC (National Research Development Corporation) and CEEW (Council on Energy, Environment and Water) were present at the unveiling event.
India has made huge strides in renewable energy and is halfway through its goal of achieving its 175 GW capacity target by 2022. Approximately 84 GW of green energy projects have been commissioned so far. Achieving the 175 GW target has the potential to generate up to one million job opportunities in the country by 2022. The Prime Minister has announced a new target of installing 450 GW renewable energy capacity by 2030. Despite this initiative, the renewable energy industry in India is fraught with issues, financing being foremost among them. The IREDA green window will go a long way in transforming the financing ecosystem for green energy projects in the country. In order to meet its ambitious targets, India needs a high degree of capital invested. Green windows will hopefully aid in increasing investment in green energy projects in the years to come.
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