IREDA Launches Loan Program for Concentrated Solar Thermal Projects Set Up under the GEF-UNIDO-MNRE Program
The Indian Renewable Energy Development Agency (IREDA) has launched a loan program to provide easy financing to Concentrated Solar Thermal (CST) projects set up under the GEF – United Nations Industrial Development Organization (UNIDO) – Ministry of New and Renewable Energy (MNRE) program. Through this the IREDA aims to create the necessary enabling environment for scaling up CST technology in India.
Any developer setting up a solar thermal heating/cooling/tri-generation project, according to IREDA guidelines, will be eligible for the benefits under this program and the minimum loan eligibility from IREDA will be Rs.5 million (~$74,187). A rebate of 20 percent will be provided to the beneficiary if the loan agreement is signed within 60 days of the passing of loan.
The GEF-UNIDO-MNRE program aims at helping remove barriers associated with CST, its awareness, capacity building, market, and financial barriers through innovative technical and financial support.
Benefits that the developers can avail under this program include:
- Soft loan at a low rate of interest (7 percent) for a seven-year period, which will be inclusive of one year moratorium.
- Bridge loan will be available at 12 percent interest until project commissioning after which MNRE subsidy will be provided to the developer and the loan will be closed.
- Projects will be eligible for interest rebate of 1 percent if the developer can provide Bank Guarantee/Pledge of FDRs as the primary security, equivalent to the amount approved by IREDA for both soft loan and bridge loan.
- It will create a single window for multiple funding, developers need to submit just one application to IREDA for MNRE subsidy, IREDA Soft Loan and Bridge Loan.
The IREDA has also mandated that the supplier must provide additional performance guarantee for a seven-year period or until complete repayment of loan and payment guarantee from the beneficiary. The agency has also asked the promoters to provide an undertaking that in case non–release of capital subsidy, the company will bring in equity to repay IREDA loan.
An official at IREDA commented, “as the country is getting industrialized the industrial cost of power is bound to rise, CST and its large-scale utilization will lead to reduction of both, costs and emissions.” The IREDA’s new loan program has been launched to complement growth of CST in the country.