Shri Pradip Kumar Das, Chairman & Managing Director of the Indian Renewable Energy Development Agency Limited (IREDA), emphasized the agency’s commitment to reducing borrowing costs and improving the bankability of India’s renewable energy sector at the CII Financing 3.0 Summit in Mumbai. He stressed the importance of a Green Taxonomy in accelerating the growth of India’s green energy initiatives.
During his address on “Green Financing, Climate Risks and Sustainable Taxonomy: Way Forward,” Shri Das highlighted IREDA’s focus on creating a supportive ecosystem for renewable energy growth across India, beyond merely improving its Net Interest Margin (NIM). He noted that while the global financial community increasingly sees green energy as a significant opportunity, the absence of a Green Taxonomy is a barrier to larger-scale investment.
Shri Das outlined initiatives to reduce borrowing costs, including a proposal for IREDA’s inclusion under Section 54EC of the Income Tax Act. This inclusion would offer capital gains tax exemptions on bonds issued by IREDA, making it easier to access low-cost funds for the green energy sector.
He also mentioned that IREDA had submitted a draft Green Taxonomy to the Ministry of New & Renewable Energy (MNRE) over a year ago. The proposed Climate Taxonomy, as highlighted in the Finance Minister’s budget speech, aims to increase capital availability for climate adaptation and mitigation projects. Shri Das stated that implementing this Green Taxonomy would help India achieve its Net Zero goals and attract significant global green funding by clearly defining eligible activities.
To further promote green investments, Shri Das suggested allocating up to 5% of Assets Under Management (AUM) from domestic pension and insurance funds into Green Bonds. This move is intended to strengthen bond markets and draw more global and local investments into the green sector.
Highlighting IREDA’s commitment to inclusive growth, Shri Das noted that women make up 27% of IREDA’s workforce, likely the highest female participation among CPSEs. He also mentioned that IREDA is exploring the feasibility of providing financing to retail and small and medium enterprises (SMEs) in the renewable energy sector, which are currently underserved.