- Recently, the Union Cabinet approved the infusion of Rs 1,500 crore in the Indian Renewable Energy Development Agency (IREDA).
- This will enable IREDA to lend Rs 12,000 crore to the renewable energy sector.
- Earlier, the IREDA had launched a ‘whistle-blower Portal’, as a part of ‘Vigilance Awareness Week 2021’.
- This equity infusion will help in employment generation of approximately 10200 jobs-year and CO2 equivalent emission reduction of approximately 7.49 Million Tonnes CO2/year.
- Additional equity infusion of Rs.1500 crore by Government of India will enable IREDA:
- To lend Rs.12000 crore approximately to the Renewable Energy (RE) sector, thus facilitating the debt requirement of RE of additional capacity of approximately 3500-4000 MW.
- To enhance its networth which will help it in additional RE financing, thus contributing better to the Government of India targets for RE.
- To improve the Capital-to-Risk weighted Assets Ratio (CRAR) to facilitate its lending and borrowing operations.
CRAR, also known as CAR (Capital Adequacy Ratio) is critical to ensure that financial organisations have enough cushion to absorb a reasonable amount of losses before they become insolvent.
- IREDA is a mini ratna company under the Ministry of New and Renewable Energy (MNRE).
- It was set up in 1987 as a specialized non-banking finance agency for the renewable energy sector.
- IREDA plays a key role in the renewable energy project financing which gives confidence to the financial institutions/banks to lend in the sector.
SOURCE: THE HINDU,THE ECONOMIC TIMES,MINT