PM-KUSUM Scheme: IREDA Launches Retail Division, Sanctions First Loan

In a strategic move to bolster its support for renewable energy initiatives, the Indian Renewable Energy Development Agency Limited (IREDA) announced the launch of its retail division on December 5, 2023. This new division is dedicated to providing loans in sectors such as the Pradhan Mantri Kisan Urja Suraksha evam Utthaan Mahabhiyan (PM-KUSUM) scheme, Rooftop Solar, and various Business-to-Consumer (B2C) segments.

Pradip Kumar Das, Chairman & Managing Director of IREDA, unveiled the retail division's operations during the Leaders’ Dialogue on 'Actioning Solutions for Global Sustainable Development and Governance of Resources.' The event was organized by the Council on Energy, Environment and Water (CEEW) and the Confederation of Indian Industry (CII) as part of COP28 in Dubai on December 7, 2023.

Following its inauguration, IREDA's Retail division swiftly approved its inaugural loan, totaling Rs. 58 crores under KUSUM-B. This underscores IREDA's commitment to becoming a preferred lender in emerging segments, replicating its success in other renewable energy sectors. Pradip Kumar Das also proposed a noteworthy step toward sustainable investing by suggesting a 1%-2% allocation of Assets Under Management (AUM) for domestic pension and insurance funds into Renewable Energy (RE) bonds. This strategic move aims to deepen bond markets, encouraging increased global and local investments.

During two panel discussions at COP28, Shri Das shared valuable insights. In the first discussion, organized by the Asian Development Bank, the focus was on 'Scaling Up Climate Finance to Meet India’s Energy Transition Goals.' Das emphasized the necessity of establishing a comprehensive green taxonomy covering the entire spectrum of Renewable Energy and green technology-based investments. This, he argued, would enhance transparency in the sector, attracting investors committed to sustainability.

In the second panel discussion, jointly organized by the International Solar Alliance and CII, the topic was 'Financing Industry Transitions in Emerging Markets and Developing Economies.' Das highlighted the importance of finding and financing low-emission solutions to meet the rising energy demand. Recognizing the evolving green energy landscape, he emphasized the need for unique solutions across both traditional and new sectors.

Addressing potential solutions for emerging and new renewable energy technologies, Das underscored the necessity to leverage climate funds. He advocated for low-cost funding to improve risk-adjusted returns and mobilize private capital on a larger scale. This approach, he argued, would enable low-cost funds, accommodate margins for Non-Performing Assets (NPAs), and mitigate the impact of rising interest rates.