European Investment Bank (EIB) and Indian Renewable Energy Development Agency (IREDA) have signed an agreement wherein EIB will finance energy efficient projects in India, helping the country achieve enough renewable energy to increase its green capacity.
According to the International Energy Agency (IEA), India will be the fastest growing energy consumer and market by 2040, resulting in the need for increased use of renewable energy. The country has positioned itself distinctively with its target of achieving enough renewable energy projects over the next three years to surpass 200 gigawatts (GW) of green capacity.
India is looking at financial gains through foreign investments, which are crucial for the country’s renewable energy market as it is the lower cost of foreign capital and size of the market that has helped the country bring down tariffs for green energy.
One such agreement between European Investment Bank (EIB) and Indian Renewable Energy Development Agency (IREDA) Ltd., was signed yesterday. The loan agreement for the second line of credit (LoC) of EUR 150 million on non-sovereign basis will be used for financing renewable energy and energy efficient projects in India that will benefit over 1.1 million households with clean energy.
Speaking about India’s fascinating journey to electrify every single village, R K Singh, Union Minister of State (IC) Power and New & Renewable Energy said, “There are villages in Ladakh and Arunachal Pradesh where you track on foot for three to four days to reach. Our aim is to bring electricity to even these remote places. We have decided to go green, as we have a responsibility to future generations and the planet.”
Highlighting the fact that renewable energy has now become economically viable, he adds that companies bidding for renewable energy projects are getting funds from all over the world.
The speed with which the second line of credit was negotiated shows the mutual confidence and comfort that EIB and IREDA have developed after working with each other for the last four years. Moreover, the EIB has extended this line of credit without insisting on a sovereign guarantee from Government of India.
“India’s goal to reach to 175 GW of solar energy by 2022 against the current 38 GW sounds ambitious but is also feasible. First, because the price of solar installations is falling as technologies are improving and partnerships are strengthening. France is quite willing to be the first partner,” Ségolène Royal, special envoy for implementation of the International Solar Alliance (ISA), told the Media India Group.
As of now, India is largely dependent on fossil fuel imports to meet its energy demands, with about 70 pc of its electricity generation coming from burning them. Fuel imports are costing the country a huge amount in terms of its valuable foreign capital, which can be constrained if the needs are met by renewable energy.