CABINET APPROVES EQUITY INFUSION IN IREDA

CABINET APPROVES EQUITY INFUSION IN IREDA

Context:

On 19 January 2022, the Cabinet Committee on Economic Affairs approved the equity infusion of Rs.1500 crore in the Indian Renewable Energy Development Agency Limited (IREDA).

Key Points:

• This inclusion of equity will help create job opportunities for about 10200 jobs and reduce CO2 equivalent to CO2 estimated at 7.49 Million Tonnes CO2 / year.

Additional allocation of Rs.1500 crore by the Government of India will allow IREDA:

• To lend Rs.12000 crore to the RE sector, thus simplifying the need for RE credit for an additional capacity of 3500-4000 MW.
• Improve its networth that will enable it to provide additional funding for RE. Thus it will make a better contribution to the Government of India.
• To improve the capital-to-risk weighted assets ratio (CRAR) to facilitate its borrowing and lending activities.

IREDA:

• It is a Mini Ratna company (Category-1) under the management of MNRE.
• It was established in 1987 to operate as a specialized non-banking financial institution for the Renewable Energy (RE) sector.
• IREDA, with more than 34 years of technical expertise, plays a significant role in funding the RE project, which gives hope to FIs / banks to lend to the sector.