A loan agreement to this effect has been signed between ADB and the government of India.
The loan, which is part of a $500m multitranche financing facility, will be used to fund 990MW of renewable energy subprojects including wind, biomass, hydropower, solar, and cogeneration technologies in the country.
ADB India country director Teresa Kho said: "ADB’s loan will help the government scale-up renewable energy infrastructure by facilitating investments in projects that will balance the objectives of growth, climate change, and energy security.
"ADB funds can be used to finance up to 50% of the subproject cost, and the first tranche loan will help IREDA debt finance around 10 or more renewable energy projects, depending on the individual project sizes."
IREDA’s program will benefit from $300m in equity and other investments from subproject sponsors, and at least $200m of additional debt funds from unrestricted sources for a total investment program of around $1bn.
Ministry of Finance Economic Affairs Department Joint Secretary S. Selvakumar said: "Lack of sufficient long-term debt financing for renewable energy projects in India is one of the major challenges to sustaining high levels of renewable energy deployment. This program will help meet this requirement by providing long-term funds for these subprojects."
Earlier this year, Germany also committed to provide around EUR1bn in loans for solar power projects in India over the next five years.
