The Indian Renewable Energy Development Agency (IREADA) may be borrowing up to ₹48,000 crore as part of the Centre’s contribution to the subsidised solar pump scheme announced in the Budget.

The option is being considered after the Power Ministry and the Renewable Energy Ministry have not been able to convince the Finance Ministry of fund allocations, which is said to have delayed the timelines for implementation of the KUSUM ( Kisan Urja Suraksha evam Utthaan Mahaabhiyan ) — the subsidised solar water pump scheme — announced in the Budget.

“On a per pump basis the Centre will subsidise 30 per cent of the cost, the State will do the same, and 30 per cent of the amount will be as loan. The farmer has to give an upfront cost of 10 per cent and then pay the instalments to the bank…The Centre is now planning to raise the required funds through borrowings,” Secretary, Ministry of New and Renewable Energy, Anand Kumar, told BusinessLine .

“We have proposed to raise the required amount through the Indian Renewable Energy Development Agency,” Kumar added.

Speaking to reporters a day after the Union Budget, Minister of State (Independent Charge) for Power and New and Renewable Energy, RK Singh, had said the scheme required a Central financial assistance of ₹48,000 crore for 10 years. A similar amount will have to be given by the States and the financing institutions, he had explained. Effectively the scheme envisaged is of ₹1.44 lakh crore once it got the Cabinet nod.

The scheme was announced to bring respite to farmers from high-cost diesel-run water pumpsets and erratic power supplies.

In addition to cost-saving, KUSUM also envisaged a source of income for farmers by selling excess power back to the grid. KUSUM is modelled on the success of a similar programme in Gujarat’s Kheda district where six farmers raked in revenue of ₹7 lakh from selling surplus power over two years. This too is an opportunity that farmers have lost out because of the delay in approval.