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 Name||Clean Energy Finance Investment Program|
|Project Type / Modality of Assistance||Loan
|Source of Funding / Amount||
|Strategic Agendas||Environmentally sustainable growth
Inclusive economic growth
|Drivers of Change||Governance and capacity development
Private sector development
|Sector / Subsector||
Finance - Finance sector development
|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.|
|Description of Outcome||facilitated investment in renewable energy.|
|Progress Toward Outcome||Tranche 1 is under implementation. $50 million has been disbursed. Disbursement is on track for the 4 years implementation period.|
|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)||ADB has funded 1 subproject, and will liquidate IREDA's finance of 3 other subprojects. Additional subprojects have been identified for 2017 for financing.|
Summary of Environmental and Social Aspects
|Environmental Aspects||The tranche 1 loan is classified as category FI for impacts on the environment, involuntary resettlement, and indigenous peoples under ADB's Safeguard Policy Statement; the same is expected for all future tranches. Renewable energy subprojects generally offer environmental benefits because they serve as an alternative to the fossil fuel extraction, transport, and combustion associated with conventional power generation. Renewable energy subprojects funded under the MFF are generally of a small size. ADB will not finance any category A subproject under tranche 1 but may consider financing category A subprojects under tranches 2 and 3. The financing of category A subprojects will strictly follow the ADB safeguard policy for financial intermediation loans and the requirements in the ESMS. IREDA is committed to working to meeting international best practices in subproject environmental and social safeguard implementation requirements to address subproject impacts, as requested by the international lenders. Under the MFF, IREDA will establish a functioning ESSU satisfactory to ADB (and, over time, to other development partners), including the nomination of two designated full-time staff members for day-to-day implementation of the ESMS, and a responsible institutional compliance officer. The ESMS will be maintained throughout the term of the MFF. An associated TA, to be provided in 2014 or 2015, will assist IREDA to attain the required capacity to implement the ADB safeguard system. If capacity gaps exist, consultant support will be provided to fill gaps until the required capacity is in place. By the end of tranche 1, the ESSU should be capable and self-sustaining.|
|Involuntary Resettlement||Same as above.|
|Indigenous Peoples||Same as above|
|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.|
|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||Huang, Anqian|
|Responsible ADB Department||South Asia Department|
|Responsible ADB Division||Public Management, Financial Sector and Trade Division, SARD|
Indian Renewable Energy Dev't Agency Ltd. (IREDA)
Core 4A, East Court
1st Floor, India Habitat Center Complex
Lodi Road, New Delhi - 110 003, INDIA
|Concept Clearance||09 May 2013|
|Fact Finding||01 Apr 2014 to 11 Apr 2014|
|MRM||29 May 2014|
|Approval||30 Oct 2014|
|Last Review Mission||-|
|Last PDS Update||09 Mar 2017|
MFF Facility Concept 0087-IND
|Financing Plan||Loan Utilization|
|Total (Amount in US$ million)||Date||ADB||Others||Net Percentage|
|Project Cost||1,000.00||Cumulative Contract Awards|
Project Data Sheets (PDS) contain summary information on the project or program. Because the PDS is a work in progress, some information may not be included in its initial version but will be added as it becomes available. Information about proposed projects is tentative and indicative.
The Public Communications Policy (PCP) recognizes that transparency and accountability are essential to development effectiveness. It establishes the disclosure requirements for documents and information ADB produces or requires to be produced.
The Accountability Mechanism provides a forum where people adversely affected by ADB-assisted projects can voice and seek solutions to their problems and report alleged noncompliance of ADB's operational policies and procedures.
In preparing any country program or strategy, financing any project, or by making any designation of, or reference to, a particular territory or geographic area in this document, the Asian Development Bank does not intend to make any judgments as to the legal or other status of any territory or area.
|Title||Document Type||Document Date|
|Clean Energy Finance Investment Program: Report and Recommendation of the President||Reports and Recommendations of the President||Oct 2014|
|Clean Energy Finance Investment Program: Facility Administration Manual||Facility Administration Manual||Sep 2014|
|Framework Financing Agreement for Clean Energy Finance Investment Program||Framework Financing Agreement||Sep 2014|
|Clean Energy Finance Investment Program: Project Data Sheet (हिन्दी)||Translated PDS||Jul 2013|
|MFF-Clean Energy Finance Investment Program (Facility Concept)||Initial Poverty and Social Analysis||May 2013|
Safeguard Documents See also: Safeguards
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.
|Title||Document Type||Document Date|
|MFF-Clean Energy Finance Investment Program (Facility)||Environment and Social Management System Arrangements||May 2014|
Evaluation Documents See also: Independent Evaluation
None currently available.
None currently available.
The Public Communications Policy (PCP) establishes the disclosure requirements for documents and information ADB produces or requires to be produced in its operations to facilitate stakeholder participation in ADB's decision-making. For more information, refer to the Safeguard Policy Statement, Operations Manual F1, and Operations Manual L3.
Requests for information may also be directed to the InfoUnit.