Indian Renewable Energy Development Agency Ltd News: CMD highlights IREDA’s efforts towards lower borrowing costs and green taxonomy at CII Financing 3.0 Summit

Bombay: Shri Pradip Kumar Das, Chairman and Managing Director, Indian Renewable Energy Development Agency Limited (IREDA), today highlighted the company’s commitment to reducing borrowing costs and enhancing bankability of the Indian renewable energy sector. Addressing the CII Financing 3.0 Summit in Mumbai, Shri Das highlighted the critical role played by the Green Taxonomy in the rapid growth of the Indian renewable energy sector.

In his keynote address on ‘Green Finance, Climate Risk and Sustainable Taxonomy: The Way Forward’, Shri Das emphasised that IREDA is not only focused on improving Net Interest Margin (NIM). The firm is equally committed to fostering a healthy ecosystem that supports consistent growth of renewable energy across India. He noted that the global financial community is increasingly seeing the green sector as a significant business opportunity, but the lack of a Green Taxonomy remains a barrier to broader green investments.

Read also: NTPC Kaniha dedicates community hall at Hariharpur as part of CSR initiative

Shri Das has come up with several initiatives to reduce the cost of borrowing, including a significant proposal to include IREDA in Section 54EC of the Income Tax Act. This inclusion would grant exemptions from capital gains tax on bonds issued by IREDA, thereby facilitating access to cheaper funds, which would benefit the entire green energy sector.

He also informed the audience that IREDA had submitted a draft Green Taxonomy to the Ministry of New and Renewable Energy (MNRE) one and a half years ago. As announced by the Hon’ble Finance Minister in her Budget speech, the Climate Taxonomy is ready to increase the availability of capital for climate change adaptation and mitigation projects. Shri Das stated that the implementation of this Green Taxonomy will not only accelerate India’s journey towards Net Zero goals but will also enable the country to attract significant global green funds by providing a clear list of activities covered under the taxonomy.

Read also: NBCC receives orders worth Rs 182.50 crore

In a significant move to promote green investment, CMD, IREDA has suggested allocating up to 5% of assets under management (AUM) from domestic pension and insurance funds to green bonds. This strategic suggestion aims to strengthen bond markets and attract increased global and local investments in the green sector.

Shri Das also pointed out that with 27% of IREDA’s workforce being women, IREDA probably has the highest female participation rate among CPSEs, underlining the company’s commitment to inclusive growth. He also mentioned that the company is exploring the feasibility of offering financing to retail and small and medium enterprises (SMEs) in the renewable energy sector, areas that currently lack sufficient attention.

Read also: MMTC Ltd announces change in board of directors