India: Clean Energy Finance Investment Program

Sovereign Project | 46268-005

Summary

The Clean Energy Finance Investment Program (the Program) is a proposed multi-tranche financing facility (MFF) in the nature of a financial institution loan with sovereign guarantee by India, which will support the Indian Renewable Energy Development Agency Limited (IREDA) to obtain longer tenor funds for onlending to sub-borrowers for renewable energy (RE) and energy efficiency (EE) projects for up to 15 years. This program will support IREDA in financing such projects which are otherwise eligible for ADB financing, but would not be directly financed due to their smaller sizes ranging between $5 million to $15 million. Outputs will include a large number of investment subprojects for generation of RE using sources such as wind, biomass, hydro, solar, and cogeneration, and projects for improving demand-side EE.

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Project Name Clean Energy Finance Investment Program
Project Number 46268-005
Country India
Project Status Approved
Project Type / Modality of Assistance Technical Assistance
Source of Funding / Amount
TA 8365-IND: Clean Energy Finance Investment Program
Technical Assistance Special Fund US$ 225,000.00
Strategic Agendas Environmentally sustainable growth
Inclusive economic growth
Drivers of Change Private sector development
Sector / Subsector Energy - Energy efficiency and conservation - Renewable energy generation - biomass and waste - Renewable energy generation - small hydro - Renewable energy generation - solar - Renewable energy generation - wind
Gender Equity and Mainstreaming Some gender elements
Description The Clean Energy Finance Investment Program (the Program) is a proposed multi-tranche financing facility (MFF) in the nature of a financial institution loan with sovereign guarantee by India, which will support the Indian Renewable Energy Development Agency Limited (IREDA) to obtain longer tenor funds for onlending to sub-borrowers for renewable energy (RE) and energy efficiency (EE) projects for up to 15 years. This program will support IREDA in financing such projects which are otherwise eligible for ADB financing, but would not be directly financed due to their smaller sizes ranging between $5 million to $15 million. Outputs will include a large number of investment subprojects for generation of RE using sources such as wind, biomass, hydro, solar, and cogeneration, and projects for improving demand-side EE.
Project Rationale and Linkage to Country/Regional Strategy The India Country Partnership Strategy (2011) emphasizes that ADB will expand its support for renewable energy and low-carbon energy sources. As it is the principal vehicle of the government for financing RE projects, the Ministry of New and Renewable Energy (MNRE) has requested ADB to support IREDA's operations over the next 5 years. IREDA has recently adopted a medium-term business plan from FY2013 to FY2017, under which it anticipates new loan approvals of Rs 218 billion ($4.4 billion) and disbursements of Rs 139 billion ($2.8 billion) over the five-year period to RE and EE projects. IREDA plans to raise $1.3 billion through borrowings from different sources during this period, of which MNRE has requested ADB to provide $500 million. The ADB loan is proposed as an MFF to ensure IREDA has assured access to a medium term line of credit that can be progressively converted into loans depending upon actual portfolio growth. The MFF modality will also enable ADB the flexibility to provide other products, such as guarantees, in the future to IREDA in place of direct loans. The ADB loan will minimize tenor mismatch for IREDA by providing back-to-back tenors corresponding to IREDA's onlending requirements. This financing model is inherently self-sustaining, as IREDA's appraisal systems would ensure technical and financial viability of any subproject.
Impact
Project Outcome
Description of Outcome
Progress Toward Outcome
Implementation Progress
Description of Project Outputs
Status of Implementation Progress (Outputs, Activities, and Issues)
Geographical Location
Summary of Environmental and Social Aspects
Environmental Aspects
Involuntary Resettlement
Indigenous Peoples
Stakeholder Communication, Participation, and Consultation
During Project Design Environmental and Social safeguards consultants hired under this TA visited subproject sites of some prospective renewable energy subprojects proposed to be funded by Tranche 1 of the ADB loan. People from the communities were consulted at this time.
During Project Implementation
Business Opportunities
Consulting Services Individual consultants will be engaged for all the positions, namely, the Renewable Energy Finance Specialist, Financial Institutions Specialist, Economics Specialist, Social Development Specialist and Environmental Specialist. Consultants will be engaged in accordance with the Guidelines on the Use of Consultants 2010, (as amended from time to time). A total of 5 positions and 12 person-months of consulting services are required.
Responsible ADB Officer Andrew Jeffries
Responsible ADB Department South Asia Department
Responsible ADB Division Energy 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 -
Approval 09 May 2013
Last Review Mission -
Last PDS Update 26 Sep 2014

TA 8365-IND

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
09 May 2013 - 09 May 2013 30 Apr 2014 30 Apr 2015 -
Financing Plan/TA Utilization Cumulative Disbursements
ADB Cofinancing Counterpart Total Date Amount
Gov Beneficiaries Project Sponsor Others
225,000.00 0.00 0.00 0.00 0.00 0.00 225,000.00 09 May 2013 172,362.46

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