“Low-cost finance for energy transition,” a report by the International Renewable Energy Agency (IRENA) brings into focus, India’s remarkable strides in expanding its renewable energy capacity. This article elucidates on the noteworthy recognition acclaimed by India and the key highlights from the report.
Unprecedented Growth in Renewable Energy
India has set itself ambitious goals in the renewable energy sector. This includes a target of 175 GW from renewable energy sources (100 GW from solar, 60 GW from wind) by 2022, and 500 GW of non-fossil fuel capacity by 2030. Moreover, it aims to achieve net-zero greenhouse gas emissions by 2070.
These targets necessitate an estimated $10 trillion of investment. Encouragingly, India ranked third on the Renewable Energy Attractive Index in 2021, indicating its commitment to developing this sector. Furthermore, India boasts the fourth-largest solar and wind power base globally, with a rapidly growing infrastructure.
Acknowledging IREDA’s Role in India’s Achievements
The Indian Renewable Energy Development Agency (IREDA) played a pivotal role in commissioning approximately 20 GW of renewable energy capacity through financing developers. Green bonds issued by IREDA have attracted private sector investment, reducing capital costs for green projects.
Green bond issuance in India has reached a cumulative $18.3 billion, with a record issuance of $7 billion in 2021. The agency has also backed emerging technologies like battery energy storage systems, green hydrogen electrolysers, e-mobility, and waste-to-energy initiatives via innovative financing policies.
Supportive Government Policies
The Indian government’s comprehensive policies have been instrumental in meeting national renewable energy targets. Issuance of sovereign bonds aims to reduce supply from non-green bonds, thereby lowering overall bond yields.
Interestingly, local banks and insurance companies have shown heightened interest and are the primary purchasers of green bonds. There’s also a fair amount of foreign bank involvement. Green bond investments qualify towards the Reserve Bank of India’s statutory liquidity ratio and are classified as infrastructure investments by insurance companies.
Investment in sovereign green bonds is categorized as specified securities, allowing unlimited investment by foreign investors. This approach has opened up a fully accessible route for foreign investors to contribute to India’s green transition.
About IRENA
The International Renewable Energy Agency (IRENA) is an intergovernmental organization that was founded in Bonn, Germany, in January 2009. It operates from its headquarters in Abu Dhabi, United Arab Emirates. As the 77th founding member, India alongside 166 other members works towards a sustainable energy future.
IRENA supports countries in achieving renewable energy goals and serves as a hub for international cooperation, policy framework, technology, resource and financial knowledge on renewable energy. The agency encourages the adoption of all forms of renewable energy as tools for sustainable development, energy security and low-carbon economic growth.
About IREDA
Indian Renewable Energy Development Agency Limited (IREDA), a Mini Ratna Government of India Enterprise, functions under the administrative control of the Ministry of New and Renewable Energy (MNRE).
Established as a non-banking financial institution in 1987, IREDA extends financial assistance for projects relating to new and renewable sources of energy and energy efficiency/conservation. Living by the motto “ENERGY FOR EVER”, it promotes and develops environmentally-friendly energy sources.
