US agency provides $250m to support Indian renewables

Date: 
April 03, 2012

The US’ Overseas Private Investment Corporation (OPIC) has approved finance worth USD250 million to India’s Infrastructure Development Finance Company (IDFC).

The funds will be used to expand the IDFC’s lending to renewable energy and infrastructure projects and its Go Green initiative, which aims to mitigate the environmental, social and carbon footprint of its projects.

“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,” Elizabeth Littlefield, president and CEO of OPIC.

“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. We are delighted by this opportunity to team up with India’s most influential infrastructure lender.”

Despite significant growth over the past few years, India’s renewable energy sector remains underserved, primarily due to the inability of financial institutions to offer long-term lending. The lack of long-term funding options, especially given current financial market conditions, has made bi- and multi-lateral support much more critical.

“Only about a sixth of India’s renewable energy resources have been tapped so far, leaving huge potential for future market growth,” added Rajiv Lall, CEO of the IDFC, although this reflects an underestimates of the country’s wind resources.