Equity capital of IREDA likely to quadruple…

According to reports, the union ministry of new and renewable energy is lobbying the finance ministry to almost quadruple the paid up equity capital of the Indian Renewable Energy Development Agency (IREDA) to enable the latter to catalyse and fund the development of renewable energy projects in India.
“We are petitioning the ministry of finance to invest between Rs 2,000-2,500 crore additional equity capital into Ireda to allow it to expand its role in funding green power projects. We want IREDA to be able to do for the sector what the Rural Electrification Corporation and the Power Finance Corporation are playing in the conventional power sector in the country,” a top bureaucrat with the government of India told Financial Chronicle.
Ireda established on 11th March 1987 as a public limited government company promotes, develops and extends financial assistance for renewable energy and energy efficiency conservation projects. Notified as a public financial institution, Ireda is registered as Non-Banking Financial Company (NFBC) with the Reserve Bank of India (RBI).
The agency’s equity base has been steadily increased by the central government from Rs 539.6 crore at the end of March 2010 to Rs 589.6 crore at the end of March 2011 to Rs 639.6 crore at the end of September 2011.
The main objectives of Ireda are: to maintain its position as a leading organisation to provide efficient and effective financing in renewable energy and energy efficiency/conservation projects and to increase its share in the renewable energy sector by way of innovative financing.
Tarun Kapoor, joint secretary at the ministry of new and renewable energy said the ministry is working on methods by which to channelise a larger quantum of cheaper funds to IREDA.
“At this point of time the agency’s cost of funds is just around 1-1.5 percentage points. We are taking a multi pro­nged approach to this by setting up Solar Corporation of India as well as looking to allow IREDA to raise foreign currency denominated debt in global markets.”