Policy for Financing Renewable Energy & Green Mobility
Dear-Businessman/Investors,
In Series of KIP: Business and Subsidy Update, today we are going to share with you benefit of Comprehensive policy for financing new technologies for promoting & increasing usage /penetration of Renewable Energy & Funding of green mobility segment.
Accelerating sustainable energy transitions away from carbon-based fuel sources is key in achieving climate mitigation promises and energy security objectives and India is poised well to achieve this objective. Recently, Government of India has set a target of non-fossil energy capacity of 500 gig watts (GW) by 2030 and Net-Zero by the year 2070. Electricity comprises only around 16.5% of the final energy consumption at the national level and additional efforts are required to reduce greenhouse gasses (GHG) emitted by the remaining 83.5% energy sector. Accordingly, for large scale integration of Renewable Energy and increasing its usage in the economy beyond scope of meeting power sector requirement only, there is a need for constant focus and investments in new and emerging technologies to integrate renewable energy usage in Industry and Transport sector as well. To meet this goal, development of robust manufacturing and deployment infrastructure for Battery Energy Storage Systems (BESS), Green Hydrogen, Bio fuel, greenmobility and charging infrastructure shall play a major role. To meet the demand of sustainable alternatives towards mobility, IREDA is already financing Compressed Biogas (CBG), Bio Ethanol Production projects and propose to further extend its mandate for financing entire value chain of green mobility. The details of the Policy are as under:
Terms and conditions for Financing of manufacturing/ new technologies:
| 1 | Eligible Technologies | • Battery Energy Storage Systems (BESS) and manufacturing of batteries • Projects involving production of Green Hydrogen (Electrolysers) • Fuel Cells, • Manufacturing/ assembling plant of Electric Vehicles and associated components, • Waste Recycling units to meet the demands of the RE Sector, Electric Mobility and BESS Segments. |
|---|---|---|
| 2 | Minimum Loan Amount | As per IREDA Norms |
| 3 | Quantum of IREDA Loan | Maximum 70% of the project cost |
| 4 | Loan Repayment period | • Upto 7 Years for manufacturing (in case of E Mobility & associated components, Waste recycling units and Manufacturing of batteries) • Upto 80% of the balance concessionaire/ agreement period (in case of BESS, Projects involving production of hydrogen and Fuel Cells) In cany case, repayment period should not be more than 20 years under the scheme. |
| 5 | Moratorium Period | Upto 1.5 Years |
| 6 | Interest rate | As per IREDA Policy |
| 7 | Upfront Equity | 100% |
| 8 | Security | a) Mortgage of immovable assets by way of deposit of title deeds or any other legally recognized mode, if applicable b) Hypothecation, over movable properties, and assets, including plant & machinery, machinery spares, equipment, tools & accessories, furniture, fixtures, vehicles, and all other movable assets, both present and future. c) Charge on the Project’s operating cash flows, book debts, receivables, commissions, revenues of whatsoever nature and wherever arising of the Borrower, both present and future. d) Assignment of Rights, as applicable e) 2 Quarter DSRA: FD/BG be done for First quarter before achieving SCOD/ Completion and for second quarter DSRA will be built up within 12 months from the SCOD/ Completion date. f) Trust and Retention Account (TRA)/Special Bank Account to be opened for receipt of Sale proceeds/revenue from concession agreements etc. for repayments/payments to be appropriated directly, or, on demand. g) Ant other security, as per IREDA Guidelines Additional Securities – one or more securities from the following may be stipulated, to the satisfaction of IREDA: a) Corporate Guarantee b) Personal Guarantee c) Pledge of shares - (minimum 51%) of the applicant company to be pledged with IREDA. d) 20% of the loan amount in the form of BG/ FD, Commercial Property/ Residential Property, as per requirement based on project strength e) Any other as per IREDA guidelines |
| 9 | All other term and conditions | As per IREDA Policy |
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