05 May 2016 Current Affairs: State-run Indian Renewable Energy Development Agency (IREDA) might be converted into a Green Bank to enable it to access funding from overseas banks .
IREDA might be converted in to Green Bank without under going any altercation in its basic structure to enable it access funding from overseas banks that are currently not supporting the solar and wind funding, barring well-known KFW, IREDA With IREDA conversion into Green Bank, it would be entitled to avail of certain benefits, which the agency is currently deprived of and the proposal is being well supported by the Union Power Ministry .
Large banks in India are perhaps reluctant to fund the solar and wind projects though no developer in these two segments have defaulted on re-payment though might have delayed the pay off schedule .Council on Energy, Environment and Water (CEEW), and Natural Resources Defense Council said that India's goal to ramp up solar and wind energy capacity could get a major boost through two fast-growing financing innovations green banks and green bonds.
The clean energy target is the centrepiece of India's climate pledge announced in the international Paris climate agreement recently signed by more than 170 countries at the United Nations.
IREDA, an arm of the Indian government, currently appears to be the closest institutionally to a green bank, the report notes. Yet, opportunities for state level banks also appear promising.
Green banks are public entities created to work with the private sector to increase investment in clean energy and bring clean energy financing into the mainstream. They are innovative and new tools that have been successful in the United Kingdom, Australia, Japan, Malaysia and several US. states.