Clean Energy Movement Gains Momentum: MoU Signed Between IREDA and US Exim Bank
Clean Energy Movement Gains Momentum: MoU Signed Between IREDA and US Exim Bank
An MoU or Memorandum of Understanding has signed between IREDA (Indian Renewable Energy Development Agency Ltd) and the US Exim Bank. This MoU is regarding cooperation on clean energy investment.
About the MoU
The Memorandum of Understanding was signed by Mr. K. S. Poplin (Chairman and MD IREDA) and Mr. Fred P. Hochberg (Chairman and President, Export Import Bank of the United States) in a ceremony that was attended by the Secretary, MNRE (Ministry of New and Renewable Energy) Upendra Tripathi along with senior officials from MNRE as well as IREDA and US Exim Bank.
Purpose of the MoU
The MoU is intended to form a framework for cooperation in the field of financing of creditworthy entities for renewable energy projects and the facilitation of export of goods as well as services of US origin or manufactured in India along with other forms of collaboration between IREDA and US-Exim Bank.
US Exim Bank shall also provide USD I billion medium as well as long term guaranteed or direct dollar loans for financing US technologies as well as products and services used during commercial development activities in the clean energy sector by IREDA. This proposed credit facility carries lack of specific commitment on part of IREDA though and it will depend on factors such as the import of US equipment to India and the attraction of the credit facility for project developers in India. In good news for the clean energy sector in India though the US Exim Bank facility will be available for financing imported US equipment and financing of 30% of the domestic component.
IREDA will now be offering a fresh window of credit facility for developers who want to meet requirements through this means. The credit facility in question will be available for a repayment period of 18 years with the same rate of interest.
Sectors Identified as Priority Areas
Clean energy cooperation as part of this MoU has been signed to include the following priority sectors:
1. Solar (utility scale PV and CSP; this includes solar tower)
2. Wind
3. Hydro and any other Renewable Energy projects
4. Waste-to-Energy
5. Other areas of cooperation as decided
About IREDA
IREDA is a central PSU which is under the Ministry of New and Renewable Energy, Government of India. It is a developmental financial institution in the field of renewable energy and it is oriented towards providing financial assistance through term loans for eligible project developers for setting up new and renewable energy sources and projects in the field of energy efficiency.
Regarding US-Exim Bank
This is a state agency of the US with the mandate to aid financing of creditworthy entities for facilitation of export of goods and services of US origin or manufacture.
Conclusion
The agreement has many positive repercussions for the clean energy sector in India. Ideally, foreign support and investment should also benefit the domestic clean energy industry too.
