IREDA - Financing and Promoting Renewable Energy

Financing and Promoting Renewable Energy
THE BEGINNING
Realising the potential and the significance of new and renewable success of energy national development with particular reference to rural sector and to implement the Government policy of conserving/generating energy, Indian Renewable Energy Development Agency (IREDA was incorporated as a Public Limited Government Company in 1987, under the administrative control if Ministry of Non-conventional Energy sources(mnes) with "Energy for Ever" as its motto and with the following objectives:

To promote Renewable Sources of Energy
To provide Financial support to Manufacturers and Users
Act as a Financial Intermediary
Assist in Rapid Commercialisation
To Promote Energy Efficiency, and
To provide Consultancy

IREDA'S MISSION
"To be a Pioneering participant friendly and Competitive Institution for financing and Promoting self-sustaining investment in energy generation from renewable sources and energy efficiency for sustainable development"
IREDA operates a revolving fund to develop, promote and finance commercially viable NRSE technologies in the country. With the assistance, grants, borrowings and line of credit from the World Bank and other bilateral and multilateral financial institutions, it has been extending softterm loan assistance to the prospective developers in various sectors of New and Renewable Sources of Energy. IREDA continues to be the main instrument for achieving the objectives of the Government
CORPORATE VALUES

Customer Friendliness
Team Work
Productivity
Total Quality
Partnership for Sustainable Development

IREDA's mandate covers a wide spectrum of financing activities including those that are connected with energy conservation and efficiency. At present, IREDA's lending is mainly in the following areas:
SECTORS
Solar Energy Technologies
Manufacture and Utilisation of Solar Thermal and Solar Photovoltaic Systems.
Wind Energy
Setting up grid connected Wind Farm projects.
Small Hygro
Setting up Small, Mini and Micro Hydel progects.
Bio-Energy Technologies
Support to biomass based co-generation and power generation projects, biomass gasification, energy from waste and briquetting projects.
HYBRID SYSTEMS Energy Efficency & DSM
Support to projects leading to energy saving in Domestic, Commercial, Industrial and Agricultural sectors both proposed by end users as well as those involving Energy Service Companies (ESCOs). Schemes cover both Supply Side Management as well as Demand Side Management (DSM).
FINANCING NORMS
The highlights of financing norms are:
PROMOTIONAL ACTIVITIES
Apart from the rile of a Financial Institution, IREDA also conducts various promotional initiatives through business meets, seminars and workshops etc. IREDA promotes entrepreneurship through its various Enterpreneurship Development Programmes (EDPs); a number of them exclusively devoted to women. It also encourages more and more women participation. IREDA takes critical care to ensure environment friendliness in the renewable energy technology applications. The agency encourages rural development, self-employment and self reliance through decentralised NRSE programmes and provides special concessions for North-eastern, Physically Handicapped and women entrepreneurs for setting up projects.
PERFORMANCE HIGHLIGHTS
During the initial 12 years of operation, till 30th Sept 1999,IREDA has pledged resources to the tune of Rs.3148 Crores (apprx.) for 1239 Renewable Energy and Energy Conservation projects. An amount of Rs. 1269 Crores has been disbursed. A capacity addition of 1167 MW has been supported.
Some of the performanec highlights of IRDEA are given below
Profit making from First year.
Dividend Paying.
Satisfactory Rate of Recovery Rate Since Inception.
Received global recognition and financial assistance from multilateral and bilateral institutions for the first time in Renewable energy.
First line of credit in renewable Energy by GEF-WB globally (Total Assistance 195 Million US$).
First line credit in Renewable Energy by ADB assistance (100 Million US$) and from Kfw Germany (120 Million DM).
Declared as Non-Banking Financial Institution.
IREDA's projects classified as "Socially Oriented Sector".
Successfully celebrated IREDA Decade of Service during the year 1997.
Diversified into Energy efficiency.
Launched First Integrated Global Renewable Energy consultancy Services.
Won World Climate Technology Initiative (CTI), Paris during 1999 for its significant role in the financing and promotion of self-sustaining investments in energy generation from renewable sources and energy efficiency for sustainable development.
IMPACT INDICATORS
Renewable Energy Project Sanctioned by IREDA will contribute additional power generating capacity of about 1167 MW and will also conserve/save fossil equivalent of 870000 Metric tons of Coal Replacement (MTCR) through Heat Recovery Projects, resulting in abatement of environmental pollution.
RESOURCE MOBILISATION
The high rate of development assistance to the Indian renewable energy entrepreneur requires a high rate of resource mobilisation. This has to be done in the face of unequal access to investment capital vis-à-vis the fossil fuel power sources and by overcoming the barriers that arise due to the inherent risk in sub-lending. Confronting these barriers, IREDA's resources are mobilised from the following main sources :
Equity contribution from the Government of India.
International development assistance.
Market borrowings.
Bank and other borrowings.
The present authorised share capital of IREDA is Rs.200 Crores and the paid up equity capital as on date is Rs.154.35 Crores.
INTERNATIONAL ASSISTANCE
International assistance has always been a major component in IREDA's resources. IREDA's track record of achievements has also attracted global attention. renowned multilateral and bilateral agencies have come forward to join this global movement for sustainable development. They include World Bank(WB), Global Environment Facility(GEF), Danish International Development Agency(DANIDA), Swiss Development Co-operation(SDC),Asian development Bank(ADB), KfW from Germany and the Government of Netherlands. Several lines-of-credit and grants-in-aid are also in the pipeline.
DONORS PERCEPTIONS
International Agencies have appreciated IREDA for its commendable achievement in the promotion, development and financing of Renewable Energy sector. Perceptions some of the of Lenders/donor agencies are as below :
Dutch Evaluation Mission:
IREDA has evolved into a good, active, financially sound and innovative Financial Development agency for the India renewable energy sector.
Asian Development Bank:
IREDA has satisfactorily performed the operational and institutional responsibilities in accordance with the diverse objectives for which it was created.
The World Bank:
Has found IREDA well motivated, active and having strong interest in incorporating environmental costs and benefits into the economic analysis.
Kfw, Germany
Despite its fairly young age, IREDA is an able and competent financial institution considerable technological and financial risks.
NETWORKING
IREDA also has national and international networking and co-operation with various organisations the world over and within India and has signed MoU's (Memorandum of Understandings), Letters of Intent in the areas of renewable energy, energy efficiency, consultancy, training and development, resource mobilisation etc.
RENEWABLE ENERGY VISION
IXth Five Year Plan
IREDA's activities form an integral part of the National Five Year Plans and Annual Plans and are particularly dovetailed to the Five Year Plans of the MNES. The thrust areas for development includes Grid Connected Renewable Energy Power Generation, Energy Efficienct and Demand Side Management and Research out to Remote areas. IREDA's proposal envisages ambitious targets for sanction of Rs.3779 crores for setting up renewableb energy projects. It is envisaged to support installation of power generation capacity to the tune of 1150 MW and generate energy equivalent to 392,000 MT of coal through renewable resources. The plan also envisages the setting up of a Technology commercialisation Fund of Rs.620 Million aimed at accelerating the commercialisation of emerging renewable technologies.
Corporate plan
IREDA's corporate Plan Targets for 1997-98 to 2009-10 envisages to support installation of power generation capacity to the tune of 2993 MW and generate energy equivalent to 6.50,000 MT of coal through renewable resources. apart from this 11,65,000 Square Metres of Solar Collector area is expected to be installed during this period with IREDA's Assistance.
OUTLOOK FOR THE FUTURE
To become a globally competitive economy, it is crucial to have sound power infrastructure that matches its international competitors. any reform agenda to achieve this end should focus on rationalisation of tariff structure, autonomy of regulation at the Central and State levels, restructuring of SEB'S, raising end use efficiencies through demand side management. Planned changes in the structure of the power sector aimed at facilitation of inflow of investment and for achieving the highest possible efficiency are required. Imposing environmental levies on energy consumption and related pollutants will promote energy conservation and use of renewable.
IREDA and its networking agencies have assumed the leadership role in the growth of renewable energy technologies in the country. This growth can also be attributed to the participation of the private sector, as a consequence of favourable policy frame work and investment options and opportunities available for such technologies. Industry needs to expedite its efforts further by collaborating in Research, Development and Demonstration projects in emerging renewable energy technologies to ensure commitment to its commercialisation.