Indian Renewable Energy Development Agency Ltd. (IREDA) has published a revised refinance scheme under the support by The National Clean Energy Fund (NCEF) elaborating about the revival of the operations of existing biomass power & small hydro power projects affected due to unforeseen circumstances
The scheme aims to revive the operations of the existing biomass power &small hydro power projects by bringing down the cost of funds for these projects by providing refinance at concessional rates of interest, with funds sourced from the National Clean Energy Fund (NCEF).
The credit risk of the loan to the consumer will be fully taken by the scheduled commercial bank/ financial institution. Refinance from IREDA would be secured by charge on the book debts of the scheduled commercial bank / financial institution. Additional security such as charge on immovable properties / movable properties, guarantee of government, promoter, sponsor bank, etc. in favor of IREDA may be stipulated at the discretion of IREDA. The nature and extent of security will be determined to the satisfaction of IREDA on a case-to-case basis.
Security for loans to borrowers at the primary level
The scheduled commercial banks and financial institutions may have secured the loans extended by them to the primary borrowers by adequate security in accordance with their internal lending norms as approved by their Board of Directors / Competent Authority, in conformity with the applicable guidelines of the Reserve Bank of India (RBI) / other regulators. This may include primary security of adequate value in the form of hypothecation / other charge over the assets financed or, at the discretion of the primary lending institution, security of adequate value in the form of other assets such as receivables, property, life insurance policies, bank fixed deposits, or such other security as may be deemed appropriate to fully secure the loan.
Repayment of principal shall be made by the scheduled commercial bank / financial institution to IREDA as follows:
(a) Repayment period for the refinance amount should be co-terminus with the repayment period of Bank/FIs for that project and the maximum repayment period shall be 10 years apart from moratorium/grace period of 6 months from the date of disbursement/ release of Refinance Loan from IREDA, the amount will be repaid to IREDA in accordance with the repayment schedule as may be specified by IREDA.
(b) The due date for repayments of quarterly installments shall be the last day of each calendar quarter (i.e. 31st March, 30th June, 30th September and 31st December each year).
(c) The date of repayment will be reckoned as the date on which credit of the amount is received in the account of IREDA. However, if the repayment of installment is made before the due date, credit will be given only on the due date.
a) Operation of the project: The scheduled commercial banks/FIs can obtain an undertaking from the promoter that they will run the project for atleast 3 years after the refinance with an average PLF of 40% in case of biomass power projects and 25% of the designed PLF/generation for SHP Projects.
ii) Periodical Returns: IREDA may call for information or returns at periodic intervals from the scheduled commercial bank / financial institution availing of refinance from IREDA. The scheduled commercial bank / financial institution should be prompt and regular in submission of the requisite returns.
iii)Inspection: The books of account, registers, and all other relevant records of the scheduled commercial bank / financial institution as also the sites of the project loans, can be inspected by IREDA or any authorized representative on behalf of IREDA.
iv) Monitoring: Scheduled Commercial Banks/FIs to submit the generation details of the project/s under consideration every 6 months as per IREDA format.