The Indian Renewable Energy Development Agency Ltd and German development bank KfW have signed an agreement for financial assistance of Euro 19.971 million (Rs 140 crore) to promote biomass power generation in India. The agreement was signed at KfW headquarters in Frankfurt, Germany, in the presence of Kumar Sanjay Krishna, Joint Secretary, Department of Economic Affairs, Ministry of Finance.
The loan aims to accelerate the adoption of environmentally sustainable biomass power and cogeneration technologies in India. It will promote innovative biomass projects of combustion, gasification, methanation and cogeneration technologies for power generation.
The concessional loan provided by KfW to IREDA has a fixed interest rate with a 40-year repayment period. The loan agreement is KfW's third line of credit to IREDA for promoting renewable energy and energy efficiency projects in India. The first two lines together amounted to Euro 111 million (Rs 780 crore).
Under the loan, up to seven model implementation biomass projects are to be financed. The purpose is to demonstrate how technological, institutional and financial barriers can be overcome. The project reflects the Government of India's agenda of inclusive growth and its focus on a low-carbon growth strategy for power generation.
Since the 1950s, more than Euro 8 billion has been sanctioned by KfW on behalf of the Government of Germany, mainly in the fields of energy, financial sector development, health and protection of environment and natural resources. Currently, 12 energy sector projects with KfW loan commitments of more than Euro 1.2 billion (Rs 7,700 crore) are being implemented in India.