Renewable energy projects need debt financing over grants: IREDA CMD

October 28, 2024

New Delhi: Emphasizing the need for competitive debt financing over grants, Pradip Kumar Das, Chairman and Managing Director of Indian Renewable Energy Development Agency Limited (IREDA), highlighted the importance of strategic funding mechanisms for renewable energy projects.

Speaking at the Bhutan-India Renewable Energy Roundtable in Thimphu, Das outlined how such financing could accelerate the region’s clean energy transition. The event was jointly organised by the governments of India and Bhutan, focusing on enhancing renewable energy cooperation.

Das noted that IREDA is prepared to support Bhutan’s renewable energy initiatives within the regulatory framework set by the Reserve Bank of India (RBI) and the Ministry of New and Renewable Energy (MNRE). He assured that IREDA would adopt a 360-degree evaluation approach, ensuring robust project funding options that are both sustainable and viable for long-term growth. “IREDA’s experience in the sector allows us to offer competitive interest rates and long-term loan tenures, which can significantly drive Bhutan’s renewable energy growth trajectory,” he said.

He also suggested that Bhutan explore rooftop solar development in addition to its existing hydro power capabilities. “Rooftop solar could be a key area of development that complements Bhutan’s renewable resources. With large hydro power now classified as renewable energy, IREDA can also support financing for such projects, reinforcing our commitment to decarbonisation and clean energy initiatives,” Das added.

Participating in the discussion, S.K. Dey, General Manager (Projects), IREDA, spoke during the session titled “Role of Solar Energy in Energy Mix.” He highlighted the potential of blended financing models to develop solar projects in Bhutan, stressing that combining various funding sources like equity, loans, and grants could effectively drive growth in the sector.