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Combating climate change through the promotion of renewables
Project
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Project start date
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Status
Ongoing
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AFD financing amount
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170000000 €
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Country and region
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Location
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New Delhi
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Type of financing
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Beneficiaries
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IREDA
AFD has opened two lines of credit to the public Indian bank IREDA to finance the production of electricity from renewable resources.
Context
Accounting for strong economic and demographic growth, the country’s energy needs are expected to double by 2035. In addition, the high proportion of fossil fuels in the national energy balance is increasingly contributing to climate change.
These energy trends pose an environmental threat. Indeed, India has become the world’s third largest greenhouse gas-emitter, and has one of the highest emission growth rates in the world.
In order to achieve energy security and to develop a low carbon economy, India has decided to capitalize on its strong renewable energy potential, with the aim of reaching 50% of its power generation capacity through non-fossil resources by 2030. The government of India has set an ambitious target of increasing its installed capacity to 100 GW of solar power and 60 GW of wind power by 2022.
AFD supports the Indian government in its resolve to combat climate change and to provide energy to all its citizens, with a focus on developing renewable energies.
Description
IREDA (Indian Renewable Energy Development Agency) is a public financial institution set up by the government of India to promote renewable energy development and energy efficiency projects.
In order to assist the institution in achieving its goals, AFD has provided IREDA with financial and technical support. This funding has gone a long way in promoting a range of renewable energy projects led by independent energy producers.
The first funding awarded to IREDA in 2010 (EUR 10 million credit line) resulted in the implementation of eleven projects, ranging from biomass to small-scale hydroelectricity, wind farms, and solar photovoltaic projects.
This success has led AFD and IREDA to renew and extend the scope of their cooperation. In 2013, AFD allocated to IREDA a new credit line of EUR 100 million, with a focus on the development of solar power plants.
A technical assistance programme has been implemented together with this line of credit.
Impacts
- Diversification of the energy mix and reduction of greenhouse gas emissions through the development of 19 renewable energies projects
- Developing access to cheap and climate-friendly energy for the population
- Creation of new employment opportunities
- The management of IREDA’s operations has been strengthened.