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As the largest pure play green financier, what is the long-term path for IREDA? Pradip Kumar Das responds


Pradip Kumar DasChairman and CEO of IREDAhighlighted the significant growth the organization has witnessed in the renewable energy sector over the past three years. He emphasized that although solar energy has been a major priority, with a substantial increase of 28 times, the loan portfolio in this sector has decreased slightly to 30% in the latest audited figures. Das also highlighted that IREDA is actively involved in new and emerging areas such as solar on the roof, excluding residential projects, while exploring opportunities in alternative sources like CBG and ethanol. Considering India’s agricultural economy, there are promising growth prospects in these sectors. Looking ahead, IREDA is set to look into areas such as pumped storage, green hydrogenoffshore wind, aiming to expand its portfolio of sustainable energy solutions.

Every time I look at IREDA’s actions and everyone is like, oh my God, is this real? It went public at less than Rs 40, then it went up to 170, actually Rs 200. So, are you pinching yourself?
Pradip Kumar Das: First of all, we are a responsible organization of the Government of India which is leading the development of renewable energy in the country through financing which is the most crucial aspect, and not just the new and emerging renewable sector. So when we launched the IPO, the market was quite uncertain about us and other stakeholders. Finally, whatever price was decided at the apex committee level, we started at Rs 32. But the issue opened at over 50 and it increased continuously up to Rs 215, 219, after which it came down and it stayed stable for a while at 170, 180.

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Again, this is the mid and small cap segment. A lot was happening and besides, as a responsible entity, our job is to stick to our fundamentals and demonstrate good governance and we do that continuously. If you see the September result on the basis of which we carried out the IPO, our December result already showed a clear improvement, which we had shared with potential investors during the road show. As I was told there are not many sellers available, it’s up to the market and stakeholders to decide anyway. As a responsible entity, we will continue to ensure our performance and best quality of corporate governance, which we do.

Praveer Sinha: Recently, the Prime Minister’s program to equip one million homes with solar power, will IREDA finance it and it will be at a highly subsidized interest rate? If this is to become attractive and implemented, financing costs will be very critical for the amount of balance beyond the subsidy provided by the government.
Pradip Kumar Das: Many times I have been asked this question. When it comes to financing renewable energy, everyone turns to IREDA. Of the total 500 gigawatts planned, the roof was planned for 40 gigawatts. We have already reached 10. So we still have to reach the remaining 30 gigawatts. Solarizations of one crore residential roofs can add around 30-35 gigawatts.

As far as funding is concerned, our ministries may have engaged REC as a nodal agency with whom we coordinate due to their pan-India network presence, as well as close coordination with distribution companies. I was told they worked with the banks and DFS. Banks were asked to have a very low margin of 50 basis points and lend below 7%. So, certainly, for a company like IREDA, this will not be feasible. The reason is that we borrow from the market and then we lend. We don’t have any kind of grant or anything regarding any type of loan in this area.

Actually this subsidy goes up to one kilowatt, around 30,000, 2 kilowatts, 60,000 and 3 kilowatts and above 78,000 this type of subsidy will be given. So, this grant will be a capital grant and the loan must then be granted for the remaining part. Lending at 7% for IREDA will not be feasible at all because we have recently raised in the bond market at around 7.5%, a little more. This is therefore not feasible at the moment.

But as far as supporting this space with REC or any bank or any other agency, because of our expertise, we are there to collaborate with them.

As the largest pure play green financier, what is the long term way forward for the company and as Dr Sinha also touched on, big bang announcements after the elections are expected on the distribution front , what are you waiting for?
Pradip Kumar Das: If you look at our loan portfolio, which we’ve more than doubled in the last three years, there was a time when our loan portfolio was over 35-40% solar, everyone’s talking about energy growth solar and everyone likes 28 times, we grew up in solar. But if you look at our book of audited numbers from December, that figure is down to 30%. If you see the new and emerging space, we have about 37% share. Will IREDA finance this rooftop solar installation or not? We use rooftop solar, but certainly not residential rooftop solar. I will make two classifications here. Firstly, there is a big retail business when we talk about residential and IREDA is a pure green finance company, but at the project finance level, we barely have 175 employees. We are also the largest green finance company. And not only that, when you talk about retail, we have N number of banks with us. We have government banks with us.

So, what is required in this solarization of roofs is that they are networked and easily accessible to individual households. So what planning banks can do, even though MNRE has engaged as a nodal agency, they have not engaged them just to finance, they have to manage the entire implementation. So, financing is open to everyone, like all banks and others, so that’s what I was trying to make clear, that the banks were asked to support with a very fine margin so that around 7 they can do it so that it is easily bankable. .

Already more than one crore registrations have been made. I saw the report on the MNRE website. Now let’s come back to new developments and developments, because when we talk about solar, each sector has its limits. First of all, when we talk about solar energy, we need a huge amount of land for it and we all know that in economics, land is the scariest asset. We must be very careful when using land.

When we talk about using the land for solar or wind projects. We are 25 years old. So the land should be barren and it will remain so for the next 25 years. Only then we need to select this type of terrain. We need to look at what kind of growth we are getting, as I always say, for every percentage of GDP growth we need at least 1.25 to 1.5 times GDP growth in the area of energy.

Therefore, the need for energy growth will be enormous. And in the times to come, when we are determined to become a developed economy in 2047, our energy needs will be enormous. So we need to look at new sources and emerging sources, like CBG and ethanol, although they may not be big in size, but as our economy is based on agriculture, we have a lot of opportunities there and we grew our loan portfolio. has also grown considerably in the last year and a half and in the times to come, this pumped storage, green hydrogen and its derivatives, as well as offshore wind, are the immediate area that we will be looking at.


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