The US Government’s development finance institution, OPIC, has agreed a $250m deal to help India’s top infrastructure lender provide more funds to renewable energy.
Despite significant growth over the past few years India’s renewable energy sector remains underserved with capital, primarily due to a lack of long-term lending from financial institutions.
The Infrastructure Development Finance Company (IDFC) said it will use OPIC’s funding to increase its lending to projects in sectors including solar photovoltaics, energy efficiency and wind farms.
OPIC said it will also support IDFC’s Go Green initiative to mitigate the social, environmental and carbon footprint of its infrastructure projects.
Elizabeth Littlefield, president and CEO at OPIC, said, “India’s renewable energy industry has grown by leaps and bounds these past few years, but in order for it to reach the next level and achieve the scale and sustainability we all wish to see, it must get long-term financing.
“In a current environment of limited liquidity, this OPIC facility will provide IDFC with precisely the long-term funding it needs to serve India’s vast capital needs for the renewable energy and infrastructure sectors.”
The project also supports a US-India pact to advance clean energy and promote low-carbon growth through the research and deployment of clean energy technologies.
IDFC managing director and CEO Rajiv Lall said, “Only about a sixth of India’s renewable energy resources have been tapped so far, leaving huge potential for future market growth.
“The OPIC facility will provide valuable support for India’s renewable energy strategy which aims not only to lower the carbon intensity of the country’s growth, but also to address the need for energy security.”
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