The US Exim Bank has agreed to provide $1 billion in medium- and long-term dollar loans to finance American technologies, products and services for clean energy development by the the Indian Renewable Energy Development Agency (IREDA).

IREDA projects

The credit facility is part of a Memorandum of Understanding signed between the two organisations on Tuesday. Renewable energy developers in India working with IREDA can use the credit facility to import US goods and services in the sector.

The credit facility will also be available for financing 30 per cent of domestically manufactured components.

The loans can be repaid over a period of 18 years with the same fixed rate of interest.

“The proposed credit facility carries no specific commitment on the part of IREDA and will depend on the import of US equipment to India and the attractiveness of the credit facility to the project developers in India,” an official statement said.

Cooperation framework

Overall, the MoU establishes a framework for cooperation in the financing of creditworthy entities undertaking renewable energy projects and facilitating export of goods and services from the US to India.

Upendra Tripathi, Secretary, Ministry of New and Renewable Energy, said that sectors such as solar, wind, hydro and waste-to-energy have been identified as priority areas in clean energy investment cooperation as part of the MoU.