Renewable energy financier seeks Rs 150 cr equity infusion

The green energy lender asks Centre to bring down its guarantee fee to reduce interest rate

Indian Renewable Energy Development Agency Ltd (IREDA), the financing agency supporting renewable energy projects in India, said it was expecting Rs 150-200 crore equity infusion from the Centre. The agency also requested the Centre to reduce the guarantee fee to bring down the interest rates.

“With the current equity base of around Rs 745 crore, we can borrow eight times more. We are expecting Rs 100-150 crore equity infusion from the government though we have asked for a larger amount,” said KS Popli, chairman and managing director of IREDA.

The agency said it was also looking at raising money through tax-free bonds from the domestic market, and said the Line of Credits (LoCs) from foreign agencies, of around Rs 8,000 crore, could be utilised for the next three-four years.

Popli said they had signed credit agreements for Euro 200 million with the European Investment Bank; $500 million with the Asian Development Bank; and Yen 30 billion with the Japan International Cooperation Agency (Jica).

In rupee terms, these agreements are valued around Rs 8,000 crore, he said.

The agency is also in talks with the KFW, the German government-owned development bank, for LoCs, he added. IREDA had gone for four rounds of LoCs from the group, which is also backing the former’s Green Corridor project in India.

During the current fiscal, IREDA had set a target to disburse around Rs 3,000 crore, while the original target was Rs 2,600 crore.

“We can enhance the disbursement further if we want,” said Popli, adding the agency had requested the Centre to reduce the guarantee fee (which the government has been charging for counter guaranteeing the loans for agency), in order to lend at competitive interest rates.

It also asked the Centre to give Rs 700-800 crore for generation-based incentive (GBI) requirement for the wind energy sector, and another Rs 100 crore from the National Clean Energy Fund for the reduction in interest subvention.

Speaking about NPAs, Popli said IREDA’s net NPA was below one per cent and the gross NPA at 4-4.5 per cent. “We do not have any NPAs in wind energy (which constitute 60 per cent of the book) and solar energy. The NPA is mainly from the bio-mass,” said Popli, adding, the agency’s current exposure to biomass was around Rs 265 crore.