India's Renewable Energy Growth Praised by IRENA

06-06-2023

Latest context

Recently, the International Renewable Energy Agency (IRENA) released a recent report titled 'Low-cost finance for energy transition'. For expanding its renewable energy capacity, it recognized and praised the efforts of India in this dimension. According to this report, the achievements of India in this field are "unprecedented".

Key Highlights of the Report

National Targets: The target of India is to achieve 175 GW (100 GW from solar, 60 GW from wind) of renewable energy capacity by 2022 and 500 GW of non-fossil fuel capacity by 2030.
Net-zero Target: India is also determined to achieve net-zero greenhouse gas emissions by 2070. It needs an estimated $10 trillion of investment.
Renewable Energy Attractive Index: India ranked third on the index in 2021, showcasing its commitment to renewable energy development.
Solar and Wind Power Base: India is having the fourth-largest solar and wind power base all over the world which is responsible for rapid growth.
Supportive Policy Framework: In order to achieve the above-mentioned targets, the Central Government is making comprehensive policies and a conducive environment.

Role of IREDA:

Issuance of Sovereign Bonds: The Central Bank is issuing sovereign bonds in order to reduce the supply from non-green bonds.
Financing Renewable Energy Projects: IREDA’ role is a very significant role in commissioning approximately 20 GW of renewable energy capacity through financing to developers.
Mobilizing Private Sector Capital: There is a very big space for private sector investment in the governmental policy framework. Private sector players are getting attracted to invest in green bonds which led to the reduction in the cost of capital for green projects. India has achieved a record of $ 18.3 billion by issuing green bonds higher than $ 7 billion in 2021.
Pioneering New Technologies: It is playing a very crucial role in employing emerging technologies like green hydrogen electrolysers, battery energy storage systems, e-mobility, and waste-to-energy through innovative financing policies.
Investor Participation: Insurance companies, local banks, and foreign banks are increasingly purchasing these bonds.
Regulatory Benefits: Green bond investments fulfil the criteria of the Reserve Bank of India's statutory liquidity ratio (SLR) and thus can be used as infrastructure investments by insurance companies.
Fully Accessible Route for Foreign Investors: Foreign Investors are encouraged for investing in sovereign green bonds. These investments under sovereign green bonds are categorized as specified securities under the “Fully Accessible Route” that permits unlimited investment by foreign investors.

International Renewable Energy Agency (IRENA)

In January 2009, in Bonn, Germany, IRENA was founded. It is an intergovernmental organisation.
It has 167 members including India which is its 77th Founding Member. It is headquartered in Abu Dhabi, United Arab Emirates.
Major Functions:
It helps the countries in their transition to a sustainable energy future. It acts as the principal platform for international cooperation, a repository of policy, and a centre of excellence, technology, resource and financial knowledge on renewable energy.
It encourages the widespread adoption and sustainable use of all forms of renewable energy, comprising geothermal, bioenergy, hydropower, solar, ocean, and wind energy in the pursuit of sustainable development, energy access, energy security and low-carbon economic growth and prosperity.

Indian Renewable Energy Development Agency Limited (IREDA)

It comes under Mini Ratna (Category – I). It works under the administrative control of the Ministry of New and Renewable Energy (MNRE).

It is a Public Limited Government Company. In 1987, as a Non-Banking Financial Institution was established. Its objective is to promote, develop and extend financial assistance for setting up projects relating to new and renewable sources of energy and energy efficiency/conservation.
“ENERGY FOR EVER” is its motto.