Introduction: IREDA-NCEF Refinance Scheme

India faces significant difficulty in supplying adequate and high-quality power for home and industrial use. Existing renewable energy projects are being hampered by regulatory uncertainty. There is a growing demand in the country to reduce reliance on fossil fuels and seek greener fuels. The Indian Renewable Energy Development Agency Ltd (IREDA) was established by the Ministry of Commerce and Industry to refinance and revitalize the affected renewable energy projects. The National Clean Energy Fund (IREDA NCEF) of the Indian Renewable Energy Development Agency (IREDA) aims to resuscitate the operation of existing Small Hydro Power (SHP) and Biomass Combustion-based Power Generation facilities by providing loans at a low-interest rate.

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What are the Objectives of the IREDA-NCEF Refinance Scheme?

These are some major ambitions of IREDA (The Indian Renewable Energy Development Agency Ltd¬) behind the IREDA_NCEF scheme: 

• IREDA-NCEF Scheme provides a major help to different businesses by providing refinance assistance at competitive rates of interest through the funds of the National clean energy funds (NCEF)
• IREDA-NCEF can also help power generation units by protecting them from unanticipated accidents like floods, thunder, draughts, etc. 
• IREDA-NCEF also assists power generation units in overcoming unanticipated accidents such as floods, thunders, draughts, etc., and unreliable strategy matters such as cancellation of PPAs, higher transmission, and subsidy charges, higher wheeling, and bank burdens, etc.
• IRES-NCEF also helps to re-energize the operations of the already available Biomass Power projects and Small Hydro Power projects also.
• This scheme will reduce the expenses of the power generation projects
• It encourages ecologically supportable power generation and it also promotes a sustainable manner of growth.

Eligibility Criteria

The NCEF funds are disbursed to scheduled commercial banks and other financial institutions by IREDA based on the following eligibility criteria:

• The renewable energy projects should have been operational for at least three years and should not have suffered any material losses.
• The gross Non-Performing Assets as a percentage of Gross Advances should normally not exceed 5% for the entire range of the lending institution. State/Central PSU Banks/Govt. NBFC’s/FIs are not included in this condition parameter.
• The Capital Adequacy Ratio should be in compliance with the Government approved regulatory norms.
• The combustion-based Biomass power projects with an installed capacity of 10 MW are eligible to claim loans under the scheme.
• Each Small Hydro Power Project with an installed capacity of 25 MW can claim to refinance up to Rs.15 Crores under the scheme.
• The project of renewable energy units must have an operational activity that should be operational at least for the last two years after the commissioning of the project.
• The renewable energy operational plant which is working for at least two years then the average of their Plant Load Factor (PLF) must be 20% for biomass power and SHP (small hydropower) also should be at least 15%.
• Loan Sanctioned against reservation of future cash flows are not eligible to claim to refinance under the scheme.
• The renewable energy projects should be revived within 6 months after claiming to revive just after the beneficiaries obtain the loan amount.
• In case of failure to meet the criteria, the disbursed amount will be recalled immediately by the IREDA. The IREDA could demand from the new renewable energy plants to repay the loan amount in a single term.
• The Financial Institutions/Banks can appeal for additional time for the revival of projects for up to 1 year, on submission of appropriate reasons to the IREDA.

The following Renewable Energy Projects are ineligible to file a claim under the scheme:

The Reserve Bank of India has labeled some borrowers as stubborn (refusing to modify their minds).

• Non-cooperative borrowers, as defined under RBI regulations.
• Projects that have been dormant for more than five years.
• Projects having a profitable turnover according to their most recent audited balance sheet 
• Projects that received a One-Time Settlement (OTS) can claim for the refinance scheme of IREDA-NCEF.

Frequently Asked Questions:-

What is the Process of Repayment of IREDA - NCEF Refinance?

The scheduled commercial bank / financial institution must repay the principal to IREDA in the following manner:

• The refinance amount should be reimbursed to IREDA in accordance with the repayment schedule given by IREDA, and the maximum payback duration shall be 10 years, except for a moratorium/grace period of 6 months from the date of disbursement/release of the Refinance Loan from IREDA.
• The last day of each calendar quarter is the due date for quarterly instalment repayments (i.e. 31st March, 30th June, 30th September, and 31st December each year).
• The date of repayment will be the day on which IREDA receives credit for the amount in its account. Credit will be awarded only on the due date if the instalment is paid in full before the due date.

What is the IREDA – NCEF Refinance Scheme?

India faces significant difficulty in supplying adequate and high-quality power for home and industrial use. Existing renewable energy projects are being hampered by regulatory uncertainty. There is a growing demand in the country to reduce reliance on fossil fuels and seek greener fuels. The Indian Renewable Energy Development Agency Ltd (IREDA) was established by the Ministry of Commerce and Industry to refinance and revitalize the affected renewable energy projects. The National Clean Energy Fund (IREDA NCEF) of the Indian Renewable Energy Development Agency (IREDA) aims to resuscitate the operation of existing Small Hydro Power (SHP) and Biomass Combustion-based Power Generation facilities by providing loans at a low-interest rate.

What Are The Objectives Of the IREDA – NCEF Refinance Scheme For New Renewable Energy Plants?

These are some major ambitions of IREDA (The Indian Renewable Energy Development Agency Ltd¬) behind the IREDA_NCEF scheme: 

• IREDA-NCEF Scheme provides a major help to different businesses by providing refinance assistance at competitive rates of interest through the funds of the National clean energy funds (NCEF)
• IREDA-NCEF can also help power generation units by protecting them from unanticipated accidents like floods, thunder, draughts, etc. 
• IREDA-NCEF also assists power generation units in overcoming unanticipated accidents such as floods, thunders, draughts, etc., and unreliable strategy matters such as cancellation of PPAs, higher transmission, and subsidy charges, higher wheeling, and bank burdens, etc.
• IRES-NCEF also helps to re-energize the operations of the already available Biomass Power projects and Small Hydro Power projects also.
• This scheme will reduce the expenses of the power generation projects
• To encourage ecologically supportable power generation and it also promotes a sustainable manner of growth.

What Is The Minimum Eligibility Criteria For Claiming The IREDA-NCEF Refinance Scheme?

The NCEF funds are disbursed to scheduled commercial banks and other financial institutions by IREDA based on the following eligibility criteria:

• The renewable energy projects should have been operational for at least three years and should not have suffered any material losses.
• The gross Non-Performing Assets as a percentage of Gross Advances should normally not exceed 5% for the entire range of the lending institution. State/Central PSU Banks/Govt. NBFC’s/FIs are not included in this condition parameter.
• The Capital Adequacy Ratio should be in compliance with the Government approved regulatory norms.
• The combustion-based Biomass power projects with an installed capacity of 10 MW are eligible to claim loans under the scheme.
• Each Small Hydro Power project with an installed capacity of 25 MW can claim to refinance up to Rs.15 Crores under the scheme.
• The project of renewable energy units must have an operational activity that should be operational at least for the last two years after the commissioning of the project.
• The renewable energy operational plant which is working for at least two years than the average of their Plant Load Factor (PLF) must be 20% for biomass power and SHP (small hydropower) also should be at least 15%.
• Loan Sanctioned against reservation of future cash flows are not eligible to claim to refinance under the scheme.
• The renewable energy projects should be revived within 6 months after claiming to revive just after the beneficiaries obtain the loan amount.
• In case of failure to meet the criteria, the disbursed amount will be recalled immediately by the IREDA. The IREDA could demand from the new renewable energy plants to repay the loan amount in a single term.
• The Financial Institutions/Banks can appeal for additional time for the revival of projects for up to 1 year, on submission of appropriate reasons to the IREDA.

What Is The Repayment Process Of the IREDA Refinance Scheme?

The scheduled commercial bank / financial institution must repay the principal to IREDA in the following manner:

• The refinance amount should be reimbursed to IREDA in accordance with the repayment schedule given by IREDA, and the maximum payback duration shall be 10 years, except for a moratorium/grace period of 6 months from the date of disbursement/release of the Refinance Loan from IREDA.
• The last day of each calendar quarter is the due date for quarterly installment repayments (i.e. 31st March, 30th June, 30th September, and 31st December each year).
• The date of repayment will be the day on which IREDA receives credit for the amount in its account. Credit will be awarded only on the due date if the installment is paid in full before the due date.

What Are Those Renewable Energy Projects Which Are Not Eligible For The IREDA Refinance Scheme? 

The following Renewable Energy Projects are ineligible to file a claim under the scheme:

• The Reserve Bank of India has labeled some borrowers as stubborn (refusing to modify their minds).
• Non-cooperative borrowers, as defined under RBI regulations.
• Projects that have been dormant for more than five years.
• Projects having a profitable turnover according to their most recent audited balance sheet • Projects that received a One-Time Settlement (OTS) can claim for the refinance scheme of IREDA-NCEF.