How will Budget 2021-mandated capital infusion aid SECI & IREDA?
In her Budget 2021 speech, Finance Minister Nirmala Sitharaman had announced capital augmentation of SECI and IREDA
Capital infusion will enable SECI to set up innovative projects with an investment of around Rs 17,000 crore, said the MNRE
New Delhi: In her Budget 2021 speech, Finance Minister Nirmala Sitharaman had announced capital augmentation of Solar Energy Corporation of India Limited (SECI) and Indian Renewable Energy Development Agency Limited (IREDA). She had said, "To give a further boost to the non-conventional energy sector, I propose to provide additional capital infusion of Rs1,000 crore to Solar Energy Corporation of India and Rs 1,500 crore to Indian Renewable Energy Development Agency."
Capital infusion will help SECI in floating 15,000 MW tenders on yearly basis: MNRE
In an official statement, the Ministry of New and Renewable Energy (MNRE) said that the additional capital infusion of Rs 1,000 crore to SECI will enable the PSU to float 15,000 MW of tenders on yearly basis. "On yearly basis, it will attract investment of more than Rs 60,000 crore, generate employment of 45,000 job years and reduce emissions of 28.5 million tons of CO2 per year. Capital infusion will also enable SECI to set up innovative projects with an investment of around Rs 17,000 crore," said the MNRE.
As an implementing agency of the ministry, state-run SECI plans and calls for tenders for development of RE projects on pan-India basis. SECI procures RE power at the Central level, thereby reducing the off-taker risk of RE developers and sells it to DISCOMs. SECI's efforts have resulted in flow of investments from all over the world into the country's RE sector, and in a rapid decline in RE tariffs, which has led to large-scale uptake of RE in the country. The cumulative capacity installed in the country as on December 31, 2020 is 91,000 MW and further 50,000 MW of the projects are under implementation of which SECI's share is 54 percent.
IREDA will be able to extend additional loan facility of Rs 12,000 crore: MNRE
With the equity infusion of Rs 1,500 crore by the Centre, IREDA would be able to extend an additional loan facility of Rs 12,000 crore, said the MNRE. This would be in addition to its existing book size of Rs 27,000 crore. "The additional equity will also improve its capital adequacy which will help IREDA in borrowing at lower rate of interest, thus lowering the interest rates for developers. It would also help in financing of around 4,500 MW of RE projects worth Rs 18,000 to 19,000 crore. It will generate employment of 13,500 job years and reduce emissions of 8.55 million tons of CO2," the ministry added.
IREDA, a Mini Ratna (Category–I) company under the administrative control of the MNRE, was set up in 1987 to work as a specialised non-banking financing agency for the Renewable Energy (RE) sector. As a specialised RE funding agency, it has developed expertise in evaluating all types of RE projects and projects developers as well as entrepreneurs are more comfortable dealing with IREDA. International lenders also channelise their funds to India's large RE market through IREDA.
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