U.S. investment arm lends US$250 million to Indian RE projects

The Overseas Private Investment Corporation has injected long-term capital to help unlock India's huge renewable energy potential.

The U.S. government’s development finance institution has approved a US$250 million investment to assist the Infrastructure Development Finance Company (IDFC) expand its lending to RE and infrastructure projects and provide much-needed long-term capital to exploit RE potential.

IDFC, India’s premier infrastructure lender, is expected to use the OPIC financing to support solar photovoltaic projects, energy efficiency projects and projects that reduce energy consumption, among others. The financing will also support IDFC’s“Go Green” initiative that aims to lessen the social, environmental and carbon footprint of its projects.

India’s renewable energy sector remains underserved despite significant growth because local financial institutions remain reluctant  to offer long-term lending.

OPIC President and CEO Elizabeth Littlefield said that for India’s renewable energy industry to reach the next level and achieve the scale and sustainability 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. We are delighted by this opportunity to team up with India’s most influential infrastructure lender,” she said.

Dr. Rajiv Lall, IDFC Managing Director and CEO pointed out that 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.”