CB BureauIndia will receive a loan of 200 million euros from the European Union to finance multiple private sector projects for the development of renewable energy resources. The loan will be made available by the European Investment Bank (EIB) to ICICI Bank, India’s largest private bank. It is intended to provide long-term funding for investments in the cleantech sector with a particular focus on the areas of solar photovoltaic, biomass, and onshore wind power.
The investments are expected to provide a boost to India’s efforts to reduce greenhouse gas emissions, the EIB declared in a press statement. The statement described the event as the first instance of cooperation between the long-term financing institution of the 27-nation EU bloc and India under the ESF programme.
The loan to India is being provided under the EIB’s Energy Sustaina bility and Security of Supply Facility (ESF), a 4.5 billion euro programme to support the EIB’s goal of promoting renewable energy and energy efficiency in non-EU countries. The ESF is used when the bank does not need a credit guarantee from the EU because the recipients are investment-grade countries or where appropriate security can be provided. Under the current mandate, covering the period 2007″2013, the EIB is authorized to lend up to 3.8 billion euros for financing projects that contribute to the avoidance or reduction of greenhouse gas emissions through foreign direct investment or technology and know-how transfer. The greater part of the funds, amounting to 2.8 billion euros, is earmarked for Latin America, while the Asian region will receive 1 billion euros.
The EIB’s loan for India will ‘support the EU”India strategic partnership, which provides for cooperation in curbing climate change,’ the statement to the media said. It further read: ‘The EIB will ensure that the projects are economically and financially viable, technically adequate and in compliance with the bank’s environmental and social requirements.’
The projects selected for financing will enhance the production of energy from renewable resources, reduce the costs for imported energy, expand the use of domestic resources, and curb greenhouse gas emissions and other airborne pollutants. In recent times, the Indian government has sealed power purchase agreements for 35 new solar projects that are expected to add about 610MW to the country’s generating capacity by 2013. The government’s National Solar Mission has a target of adding 20GW of solar power to the grid by 2022.