EU’s Bank signs € 150 million loan to India as part of record investment in clean energy

EIB Group’s headquarters. (Copyright: EIB / Source: EIB’s website, Media section)

The European Investment Bank (EIB) last Saturday has signed a new € 150 million long-term loan with the Indian Renewable Energy Development Agency (IREDA), to support renewable energy investment across India. The loan was approved and signed by EIB’s President Werner Hoyer, the day before he also attended the International Solar Alliance summit in New Delhi, leading a European delegation. The deal is part of a record € 800 million investment by the EIB in renewable energy in India, which was announced in October last year.

Background

Since 2002 the EIB has financed more than € 6.35 billion of new solar energy investment, the 50% of which was financed in the last 7 years in developing and emerging economies. In 2017 the European Investment Bank provided the record-sum of € 1.05 billion of new financing for solar energy projects around the world, representing EIB’s largest annual support for the sector. India was the leading recipient of EIB financing for solar investment outside the European Union, both in 2017 and overall since 2013.

In the past four years, the EIB has approved plans to provide new investments in clean energy in India – mainly in solar projects – set to provide clean energy to an estimated 4.2 million households and save more than 4 million tons of carbon emissions, as explained in an official EIB document. On the 6th of October last year, the EIB announced plans to provide a record € 800 million for renewable energy investment in total across India, representing EIB’s largest ever support for energy investment in Asia.

Last week’s deal

In line with the support agreed, last weekend the EIB and the IREDA signed a new € 150 million long-term loan, to support a € 500 million investment in solar power schemes and wind farms, which is also part of an overall € 800 million investment in clean energy in the country. The agreement was signed last Saturday by IREDA chairman Kuljit Singh Popli and European Investment Bank’s president Werner Hoyer, in the presence of R.K. Singh, India’s Minister of State responsible for New and Renewable Energy.

“India is the world’s third largest electricity consumer. The expansion of solar power generation alongside cutting energy use through energy efficiency measures is crucial to supporting sustainable economic development and reducing carbon emissions”, said EIB’s president Hoyer. “The strengthened partnership between IREDA and the European Investment Bank reflects the joint commitment of India and the European Union to implement the Paris climate agreement. Investment in new solar energy and wind power schemes will improve access to clean energy for millions of Indians and create many new jobs”, he also declared in New Delhi last Saturday.

1 million households

India’s Minister of State, Mr. Singh, also welcomed the agreement. “The significant new European Investment Bank support signed today will strengthen expansion of clean energy generation across India. I welcome the continued cooperation between IREDA and the European Investment Bank that builds the clear success of new renewable energy and energy efficiency investment over the last four years”, he said. According to EIB, more than 1.1 million Indian households expected to benefit from clean energy produced by renewable energy schemes financed by the new initiative.

International Solar Alliance

EIB’s President Hoyer was leading a high-level European Investment Bank Delegation, attending the International Solar Alliance summit on Sunday. At the summit in New Delhi, whose first edition was co-chaired by Indian Prime Minister Narendra Modi and French President Emmanuel Macron, the spotlight was indeed on India, which is being viewed as a key player in tapping solar energy. India’s PM has presented on Sunday a 10-point action plan to make affordable solar technology available to all nations, which included raising the share of electricity generated from photovoltaic cells in the energy mix.

French President Macron called for affordable solar technology and concessional finance for promoting solar energy. India’s Secretary of Ministry of New and Renewable Energy Anand Kumar, who was also present at the summit, also outlined an ambitious plan, as he pledged to generate 175 gigawatts (GW) of electricity in India from renewable energy sources by 2022.

Paris COP21’s legacy

Launched on November 30, 2015, on the sidelines of the Paris Climate Change conference, the International Solar Alliance is a treaty, India-based intergovernmental organisation that aims at helping sunshine-rich developing countries to maximise renewable energy. The ISA currently has a goal of mobilising more than $ 1 billion of investments by 2030 to massively deploy solar energy, in particular countries that lie between the Tropics of Cancer and Capricorn. So far 61 countries have signed up and another 32 have ratified the treaty.

Despite never mentioning US President Donald Trump, French President Macron took a jibe at the countries that “decided just to leave the floor and leave the Paris agreement”. President Macron’s comment was a precise mention to the US which, under Donald Trump, withdrew last June from the Paris Climate Change agreement. President Macron also applauded the countries that decided “to act” instead, and said that French Development Agency will allocate € 700 million in additional spending through loans and donations by 2022 for solar projects in emerging economies, along with EIB’s effort.

EIB is one of the world’s largest financiers of climate action and over the last 5 years provided more than €21 billion for renewable energy investment worldwide, including € 2.5 billion in photovoltaic and concentrated solar power projects.