IREDA gets ‘Infrastructure Finance Status’ by RBI

Reserve Bank of India has granted ‘Infrastructure Finance Company (IFC)’ status to Indian Renewable Development Agency (IREDA). Earlier, IREDA was classified as ‘Investment & Credit Company (ICC)’.

About Infrastructure Finance Company Status (IFC)

  • Infrastructure loan means a credit facility extended by NBFCs to a borrower for exposure in the following infrastructure  sub-sectors, listed by the Harmonised Master List of Infrastructure sub-sectors.
  • IFC is a non-deposit accepting loan company with following features:
    • Minimum 75%o of total assets of an IFC-NBFC should be deployed in infrastructure loans.
    • Company should have minimum net worth of Rs 300 crore.
    • Minimum credit rating of IFC should be ‘A’ or equivalent.
  • IFCs may exceed concentration of credit norms.

About Harmonised Master List of Infrastructure Sub-Sectors

Department of Economic Affairs under Ministry of Finance notifies the Harmonised Master List of Infrastructure Sub-Sectors.

CategoryInfrastructure Sub-Sectors
Transport & LogisticsRoads & bridges Ports & their dredging Shipyards Inland Waterways Airport Railways (Track, Rolling Stock and Terminal Infrastructure) Urban Public Transport (except rolling stock in case of urban road transport) Logistics Infrastructure including Multimodal Logistics Park comprising Inland Container Depot Bulk Material Transportation Pipelines (Oil, Gas, Slurry, Water Supply & Iron Ore pipelines)
EnergyElectricity Generation, Transmission, Distribution Oil/Gas/LNG storage facility & strategic crude storage Energy Storage Systems
Water & SanitationSolid Waste Management Water treatment plants Sewage collection, treatment & disposal system Irrigation (dams, channels, embankments etc.) Storm Water Drainage System
CommunicationTelecommunication (Fixed Network) Telecommunication towers Telecommunication & Telecom Services Date Centres
Social & Commercial InfrastructureEducation institutions (Capital Stock) Sports Infrastructure Hospitals (Capital Stock), Medical Colleges, Para-Medical Training institutes & Diagnostics Centres. Tourism Infrastructure (i) Thee-star or higher category outside cities with population of more than 1 million (ii) Ropeways & Cable Cars Common infrastructure for Industrial Parks and other parks with industrial activity such as food parks, textile parks, SEZs, tourism facilities and agriculture markets. Post-harvest storage infrastructure for agriculture and horticulture produces including cold storage. Terminal markets Soil-testing laboratories Cold Chain Affordable Housing Affordable Rental Housing Complex Exhibition-cum-Convention Centre

Benefits of Infrastructure Finance Company Status (IFC)

  • Help IREDA to access wider investor base for fund mobilisation, resulting in competitive rates for fund raising.
  • Allow IREDA to take higher exposure in Renewable Energy financing.
  • Increase investor’s confidence in IREDA.
  • Enhance brand value of IREDA.
  • Generate positive outlook in market towards IREDA.

About Indian Renewable Energy Development Agency (IREDA)

  • IREDA is a Mini Ratna (Category-1) enterprise under administrative control of Ministry of New & Renewable Energy (MNRE).
  • It is a public limited government company established as a Non-Banking Financial Institution in 1987.
  • Functions: Promoting, developing and extending financial assistance for setting up projects related to new & renewable sources of energy and energy efficiency/conservation.
  • Motto of IREDA: Energy for Ever.

Sectors to which IREDA lends:

  • Solar Energy
  • Wind Energy
  • Hydro Power
  • Biomass Power & Cogeneration & Biomass (Briquetting, Gasification & Bio-methanation from industrial, Effluents)
  • Energy Efficiency & Cogeneration
  • Wate to Energy
  • National Clean Energy Fund (NCEF)
  • Miscellaneous (Loan to government bodies, Bridge Loan, GECL)
  • Others like Energy Access, Ethanol, Transmission, Hybrid and Electric Vehicle
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