OPIC Board Approves $250 Million to Expand Renewable Energy & Infrastructure Lending in India
March 29, 2012
(OPIC)
Facility with IDFC Provides Much-needed Long-term Credit, Supports U.S.-India
Partnership
WASHINGTON, D.C. – The Board of Directors of the Overseas Private Investment
Corporation (OPIC), the U.S. Government’s development finance institution, today
approved $250 million in financing to help India’s premier infrastructure lender
expand its lending to renewable energy and infrastructure projects, providing
much-needed long-term capital to the country’s effort to keep pace with the
sectors’ massive potential.
India’s Infrastructure Development Finance Company (IDFC) will use the OPIC
guaranty to expand its lending to solar photovoltaic projects, energy efficiency
projects, projects that reduce energy consumption and/or demand, and wind farm
projects, among others. The OPIC financing will also support IDFC’s “Go Green”
initiative, which aims to mitigate the social, environmental and carbon
footprint of its projects, as well as lending to infrastructure projects.
Despite significant growth over the past few years, India’s renewable energy
sector remains underserved, primarily due to the inability of financial
institutions to offer long-term lending. The lack of long-term funding options,
especially given current financial market conditions, has made bi- and
multi-lateral support much more critical.
“India’s renewable energy industry has grown by leaps and bounds these past few
years, but in order for it to reach the next level and achieve the scale and
sustainability we all wish to see, it must get long-term financing,” said OPIC
President and CEO Elizabeth Littlefield. “In a current environment of limited
liquidity, this OPIC facility will provide IDFC with precisely the long-term
funding it needs to serve India’s vast capital needs for the renewable energy
and infrastructure sectors. We are delighted by this opportunity to team up
with India’s most influential infrastructure lender.”
Dr. Rajiv Lall, Managing Director and CEO of IDFC, said, “only about a sixth of
India’s renewable energy resources have been tapped so far, leaving huge
potential for future market growth. The OPIC facility will provide valuable
support for India's renewable energy strategy which aims not only to lower the
carbon intensity of the country's growth, but also to address the need for
energy security."
Among its many benefits, the project also supports the Indian Government’s goal
of expanding renewable power generation, as well as the U.S.-India Partnership
to Advance Clean Energy (PACE), designed to improve energy access and promote
low-carbon growth through the research and deployment of clean energy
technologies.
IDFC was established in 1997 as a non-banking finance company by a consortium of
public and private investors to encourage private sector participation in the
Indian infrastructure sector. Nearly one quarter of its shares are held by U.S.
investors, including large mutual funds managed by Fidelity, Morgan Stanley and
Vanguard.
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