Raising the authorized share capital of Indian Renewable Energy Development Agency

The Cabinet today at the meeting chaired by the Prime Minister, Shri Narendra Modi gave its approval to raise the authorized share capital of the Indian Renewable Energy Development Agency Ltd. (IREDA) from the existing level of Rs.1000 crore to Rs.6000 crore. The approval does not involve any immediate requirement of funding. Infusion of equity, as and when required, would be based on level of operations. During the 12th Five Year Plan, Ministry of New and Renewable Energy (MNRE) has targeted 30,000 MW from various renewable energy projects out of which IREDA aims to finance projects of an aggregate capacity of 4800 MW. For this, IREDA would need to mobilize financial resources to the tune of Rs.14,000 crore. A higher level of authorised share capital would facilitate in leveraging higher levels of debt from the market. The MNRE has recommended strengthening of the equity base of IREDA by infusion of Rs.5000 crore through rights issue and the IPO route during the 12th Five Year Plan, in line with the Integrated Energy Policy (IEP) of the Government. Background :  IREDA is a public financial institution established in March, 1987 under the Company`s Act, 1956. IREDA is registered as a Non-Banking Financial Company with the Reserve Bank of India. Since its inception, IREDA has played a pioneering role in supporting and facilitating the policies and programs of the MNRE that has nurtured the renewable energy industry in the country. IREDA has primarily worked with private sector enterprises operating in the power sector. For over two and half decades, IREDA has been supporting the establishment of renewable energy projects and has greatly succeeded in the commercialization of sustainable energy technologies in the country. Subsequently, its business operations have been widened to extend term loans to energy efficiency and energy conservation projects as well.