India: Clean Energy Finance Investment Program - Tranche 1

Sovereign Project | 46268-002 Status: Approved

Summary

ADB and the Government of India are working together to provide long-term financing options for renewable energy projects, including wind, biomass, hydropower, and solar. The Clean Energy Finance Investment Program is supporting lending for renewable energy projects by the Indian Renewable Energy Development Agency. Private capital is being leveraged in partnership with the Indian Renewable Energy Development Agency in order to increase lending for at least 10 renewable energy projects, and to provide training for government officials to increase their knowledge of project finance.

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Consulting Notices

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Project Name Clean Energy Finance Investment Program - Tranche 1
Project Number 46268-002
Country India
Project Status Approved
Project Type / Modality of Assistance Loan
Source of Funding / Amount
Loan 3186-IND: Clean Energy Finance Investment Program - Tranche 1
Ordinary capital resources US$ 200.00 million
Loan: Clean Energy Finance Investment Program - Tranche 1
European Investment Bank US$ 253.00 million
Loan: Clean Energy Finance Investment Program - Tranche 1
Japan International Cooperation Agency US$ 280.00 million
Strategic Agendas Environmentally sustainable growth
Inclusive economic growth
Drivers of Change Governance and capacity development
Knowledge solutions
Partnerships
Private sector development
Sector / Subsector

Finance - Infrastructure finance and investment funds

Gender Equity and Mainstreaming No gender elements
Description ADB and the Government of India are working together to provide long-term financing options for renewable energy projects, including wind, biomass, hydropower, and solar. The Clean Energy Finance Investment Program is supporting lending for renewable energy projects by the Indian Renewable Energy Development Agency. Private capital is being leveraged in partnership with the Indian Renewable Energy Development Agency in order to increase lending for at least 10 renewable energy projects, and to provide training for government officials to increase their knowledge of project finance.
Project Rationale and Linkage to Country/Regional Strategy India has enjoyed high economic growth in the last decade. However, additional growth is inhibited by chronic electricity shortages, which limit commercial activity. Around 300 million citizens (around 25% of India's population) have no access to electricity, while many with access have an intermittent supply. The government's push to narrow this electricity supply gap has increased India's dependence on fossil fuels, particularly imported diesel fuel and coal. To balance the conflicting objectives of high economic growth, climate change, and energy security, India is working to increase its use of renewable energy. A major challenge to sustaining high levels of renewable energy in India is a lack of financing. Due to the relatively high upfront cost of renewable energy projects, loans of 12 or more years are usually required to make the projects financially viable. However, such long-term funds are scarce in the Indian market, where project lending is predominantly bank-based, and commercial banks have difficulty lending long-term funds from short-term deposits.
Impact increased renewable energy infrastructure.
Project Outcome
Description of Outcome Facilitated investment in renewable energy.
Progress Toward Outcome
Implementation Progress
Description of Project Outputs

Enhanced availability of long-term financing to support renewable energy projects.

Improved institutional capacity of IREDA.

Status of Implementation Progress (Outputs, Activities, and Issues)
Geographical Location
Safeguard Categories
Environment FI
Involuntary Resettlement FI
Indigenous Peoples FI
Summary of Environmental and Social Aspects
Environmental Aspects The due diligence will review (i) IREDA s current safeguards policies and framework, (ii) assess IREDA s track record and capacity, (iii) identify any gaps with ADB s Safeguards Policy Statement (2009), (iv) suggest required modifications to ensure alignment with ADB s requirements and (v) capacity building requirements to fill gaps, if any.
Involuntary Resettlement The due diligence will review (i) IREDA s current safeguards policies and framework, (ii) assess IREDA s track record and capacity, (iii) identify any gaps with ADB s Safeguards Policy Statement (2009), (iv) suggest required modifications to ensure alignment with ADB s requirements and (v) capacity building requirements to fill gaps, if any.
Indigenous Peoples The due diligence will review (i) IREDA s current safeguards policies and framework, (ii) assess IREDA s track record and capacity, (iii) identify any gaps with ADB s Safeguards Policy Statement (2009), (iv) suggest required modifications to ensure alignment with ADB s requirements and (v) capacity building requirements to fill gaps, if any.
Stakeholder Communication, Participation, and Consultation
During Project Design Extensive consultations have been conducted on executing agency (IREDA) and subproject levels on, respectively, (i) IREDA's institutional capacity, including management structure, financial and risk management, credit procedures, existing environment and social safeguard practice, and subproject compliance with local laws and regulations; and (ii) subproject transaction structure, financial performance, technical review, and environment and social safeguard reviews. On the subproject level, consultations have also been conducted in the local communities of the subproject sites during the facility due diligence.
During Project Implementation During facility implementation, IREDA shall establish an environment and social safeguard unit, fully staff it, and follow the guidelines developed in the environment and social safeguard management system when accessing the ADB funds. This includes consultations on the subproject level, required for due diligences on environmental impact, indigenous people, and involuntary resettlement, including the establishment of grievance redressal mechanism and the review of land acquisition process, all in the local communities of the subproject sites.
Business Opportunities
Consulting Services All procurement to be financed under the MFF will be carried out in accordance with ADB's Procurement Guidelines. ADB will encourage IREDA to require its subborrowers to adopt internationally competitive bidding procedures to the extent possible when the amount of the investment is unusually large and economy and efficiency can be gained through such procedures. For procurement of goods and services to be financed by subloans from the ADB loan, IREDA will ensure that prices are reasonable and that relevant factors , e.g., time of delivery, efficiency, reliability, suitability for the subproject, and (for consulting services) quality and competence are taken into account.
Procurement All procurement to be financed under the MFF will be carried out in accordance with ADB's Procurement Guidelines. ADB will encourage IREDA to require its subborrowers to adopt internationally competitive bidding procedures to the extent possible when the amount of the investment is unusually large and economy and efficiency can be gained through such procedures. For procurement of goods and services to be financed by subloans from the ADB loan, IREDA will ensure that prices are reasonable and that relevant factors, e.g., time of delivery, efficiency, reliability, suitability for the subproject, and (for consulting services) quality and competence are taken into account.
Responsible ADB Officer Anqian Huang
Responsible ADB Department South Asia Department
Responsible ADB Division Public Management, Financial Sector and Trade Division, SARD
Executing Agencies
Indian Renewable Energy Dev't Agency Ltd. (IREDA)
3rd Floor, August Kranti Bhawan
Bhikaiji Cama Pleace,
New Delhi -110066, India
Timetable
Concept Clearance -
Fact Finding -
MRM 29 May 2014
Approval 17 Nov 2014
Last Review Mission -
Last PDS Update 15 Sep 2015

Loan 3186-IND

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
17 Nov 2014 27 Oct 2015 - 30 Apr 2019 - -
Financing Plan Loan Utilization
Total (Amount in US$ million) Date ADB Others Net Percentage
Project Cost 400.00 Cumulative Contract Awards
ADB 200.00 17 Nov 2014 0.00 0.00 0%
Counterpart 200.00 Cumulative Disbursements
Cofinancing 0.00 17 Nov 2014 0.00 0.00 0%

Safeguard Documents

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Safeguard documents provided at the time of project/facility approval may also be found in the list of linked documents provided with the Report and Recommendation of the President.

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Evaluation Documents

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Related Publications

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