The International Finance corporation (IFC), PTC India Financial Services Ltd. (PFS) and the Indian Renewable Energy Development Agency Ltd. (IREDA) will partner to provide infrastructure financing for renewable energy projects in India.
PFS becomes the first institution in India, and the twenty-sixth globally, to sign IFC’s master cooperation agreement. In addition IREDA, the financing arm of the Ministry of New and Renewable Energy, is now the twenty-seventh development finance institution globally and the second in India, to sign IFC’s master cooperation agreement.
These two collaborations will help standardize steps that lenders take when co-financing projects with IFC. The ultimate aim is to make local currency financing available in shorter time-frames and reduce financing costs for lenders and borrowers enabling them to operationalize projects faster.
IFC’s master cooperation agreement was created in 2009 in response to calls for finance institutions to collaborate more closely to help meet shortfalls in private sector financing during the global financial crisis.
Since the master cooperation agreement was created, signatories have co-invested more than $3 billion with IFC to support private sector development across the world. This partnership will spur private sector investments in India’s renewable energy sector.
R.M. Malla, Managing Director and CEO, PFS. stated:
“This partnership will deepen our cooperation with IFC and other development financiers in areas such as renewable energy. In addition to reducing costs, our clients will also have access to global best practices including IFC’s environmental and social guidelines.”
Hyun-Chan Cho, IFC’s Head of Infrastructure and Natural Resources – Asia Pacific, commented:
“IFC and PFS can work more efficiently with Indian companies to spur private sector development by providing long-term risk capital where it is needed most.”
“IFC and IREDA will play a catalytic role in private sector development.”
K. S. Popli, Chairman and Managing Director, IREDA said:
“The partnership will help IREDA increase its portfolio in financing renewable energy projects, to support the government of India’s plans to establish up to 175 gigawatts of renewable energy projects over the next seven years Our clients will have access to global best practices including IFC’s environmental and social guidelines.”
Vivek Pathak, IFC’s Director for Asia-Pacific. added:
“Enhancing India’s power generation capacity is critical to expand access to electricity and support domestic manufacturing and agribusiness sectors. Partnering with IREDA will enable developers to speedily commission renewable energy projects while having a positive environmental footprint and creating jobs.”