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IREDA

FAQ's

FAQ's

Q1. Can wind farm be installed anywhere in India?
Ans. In India, windfarms can be established at MNRE/ NIWE/ State Nodal Agency identified potential sites or at sites identified by private developers duly certified by NIWE.
Q2. Is permission required for setting up wind energy projects?
Ans. Projects are required to obtain approval from Central and State Government as the case may be for setting up the project
Q3. Does IREDA provide loan assistance for setting up wind energy project?
Ans. IREDA provides term loan assistance upto 75% of the eligible project cost.
Q4. Is subsidy available for setting up wind projects?
Ans. Central Government subsidy is not available for setting up wind farm project.
Q5. Does IREDA finance Wind projects involving second hand turbines?
Ans. IREDA does not provide finance greenfield projects involving second hand equipment and machinery.
Q6. What securities are obtained by IREDA for financing Wind Farm Project or Wind Equipment?
Ans. IREDA normally obtains charge on project assets and revenue stream of project as securities. However additional securities are also obtained based on risk perception and as per financing norms.
Q7. What is moratorium period provided in Wind Sector?
Ans. Moratorium / grace period is the period during which borrower repays only interest on loan availed and maximum moratorium / grace period available for Wind projects financing is upto one year.
Q8. What is IREDA loan period?
Ans.

IREDA loan repayment period is maximum of 15 years excluding moratorium / grace period and construction period. In case of Syndication/Underwriting of projects, where IREDA is acting as the lead lender, the maximum door to door (Including construction & moratorium period) repayment period of upto 20 years may be considered.

 In case of co-financing / consortium financing or any other structured financing, IREDA’s lending can be aligned with terms and conditions proposed by lead FI/ Banks/ Underwriters/ Syndicators

Q9. Can Individuals apply for loan to IREDA for setting up a Wind farm Project?
Ans. Yes, if security of Bank Guarantee/ Pledge of FDR from a Scheduled Commercial Bank is provided.
Q10. Which turbines are eligible for IREDA’s loan assistance?
Ans. Machine types eligible (Wind Electric Generator - WEG) for financing wind projects will be as per Revised List of Models and Manufacturers (RLMM) of Wind Turbines issued by NIWE (National Institute of Wind Energy).
Q1. What is the sectoral eligibility for availing loan?
Ans.

Biomass Power:
The direct combustion power projects having capacity of 1 to 10 MW with minimum steam generation pressure of 63 Kg. / Cm2  are eligible. However the IREDA loan will be restricted to 7.5  MW Capacity.
 
Biomass Cogeneration:
- Small scale Cogeneration Projects (except sugar industries ) up to 7.5 MW installed  capacity with steam generation pressure of 63 Kg. / Cm2  are eligible.
- The projects having above 7.5 MW installed capacity (both for sugar and non-sugar industry) with steam generation pressure of 63 Kg. / Cm2  are eligible.

  -  IREDA also has additional / bridge loan scheme for SDF supported Bagasse based Cogeneration projects in addition to its normal scheme for term loan.
Q2. Is DPR required to be prepared by a reputed consultant?
Ans.

Yes, Consultants, who are involving in the power sector, are preferred.

Q3. What are the appraisal requirements?
Ans. Project should have been registered with IREDA. Detailed project report along with cost estimates and other relevant information & clarifications as requested by IREDA should have been submitted / clarified.
Q4. What are the eligibility requirements for availing loan?
Ans.

For Eligibility Requirements please refer to the General Eligibility Conditions of IREDA’s Financial Guidelines.

Q5.

What is the Security that is required to be furnished?

Ans.

For Security Requirements please refer to Security (Project Financing Scheme) of IREDA’s Financial Guidelines.

Q6.

How much time does it take for the loan to get sanctioned?

Ans.

Normally, IREDA sanctions a project within 90 days of registration of the same, provided complete details / papers are submitted by the applicant and the project is found viable from technical, financial and legal point of view.

Q7. Who are the Suppliers / Consultants?
Ans.

Click Here for the List…

Q8. What is the capacity limitation?
Ans.

Biomass Power:
1 to 10 MW (However, IREDA loan will be restricted to 7.5 MW Capacity.
 
Biomass Cogeneration:

-          For Sugar Industry: above 7.5 MW
Q1. Whether any power project using Municipal Solid Wastes funded by IREDA is in operation in India ?
Ans. A 6 MW Municipal Solid Waste Power Project funded by IREDA, being implemented in Vijayawada, Andhra Pradesh is ready for commissioning and will export power to grid in November 2003.
Q2. What are the successful technologies available in India for generation of power from MSW wastes ?
Ans.
  • Pelletisation & Combustion
  • Anaerobic Digestion
Q3. What are the wastes eligible under the Industrial sector ?
Ans. Any Bio-waste from Industrial sector (excluding Rice husk, bagasse, straw, stalks) are eligible under the sector
Q4. Whether mixing of coal with industrial wastes is allowed for power generation ?
Ans. No, However, mixing of other biomass wastes up to 25% with industrial wastes is allowed for power generation
Q5. Whether any Municipal Solid Waste power project using pyrolysis technology is existing in India ?
Ans. No.
Q1. What are Bio-fuels?
Ans. Bio-fuels are renewable liquid fuels derived from biological materials by a number of chemical / biological processes.
Q2. What are the advantages of Bio-fuels?
Ans.
  1. Renewable in nature
  2. Environment friendly
  3. Reduced dependence on fossil fuels
  4. Increased agricultural economy and rural employment
Q3. Which are the potential Bio-fuels being financed by IREDA?
Ans.
  1. Ethanol - (primarily for blending with petrol)
  2. Bio-diesel - (for blending with diesel)
Q4. What are the raw materials used for production of Bio-fuels?
Ans.
  1. Ethanol:
    There are three categories of raw-materials used for the production of ethanol: -
    1) Sugar based – sugar cane, sugar beet, sweet sorghum etc.
    2) Starch based – all types of grains including wheat, rice, corn, barley, malt etc. and tubers such as potatoes and cassava etc.
    3) Cellulose based – agro-waste, agro-residues, bagasse, rice-husk, straw etc.
  • 2. Bio-diesel:
    Edible and non-edible oil and animal fats.
    Potential sources of bio-diesel in India can be non-edible oils obtained from plants species such as Jatropha Curcas (Rattan jot), Pongamia Pinnata (karanj ) etc.
Q5. Has IREDA financed any Bio-fuels projects so far?
Ans. Yes, IREDA has already financed some ethanol projects.
Q1. What is energy efficiency?
Ans. When the specific energy consumption (units of energy consumed per unit of output) of a device or equipment is improved by changing the technology deployed, it is termed as improving the energy efficiency. For example, if we change the incandescent lamp by a Compact Fluorescent Lamp (CFL), it will result in same illumination level with less power consumption. Thus, this is a case of improving energy efficiency.
Q2. What is Energy Conservation?
Ans. In case of energy conservation, the main technology of the device or equipment remain unchanged however energy wastage is minimised by plugging the unproductive use of energy. This will also result in improving overall energy efficiency of the system. For example, we take the same case of incandescent lamp but incorporate the movement sensor or dusk to dawn timer to regulate the use of light only when it is required, it will result in conservation of energy.
Q3. What is Demand Side Management?
Ans. The energy efficiency/ conservation measure can be applied at Supply Side (viz. at the point of generation of power) as well as at Demand Side (viz. at the point where the energy is consumed). However, in view of various transmission/ distribution losses involved till the energy reaches to end user, it has been found that the Demand Side Management (DSM) is more effective than the Supply Side Management. DSM initiatives are also helpful in flatten the demand curve of utilities and thus reducing the need for peak power generators.
Q4. What are Energy Service Companies (ESCOs)?
Ans. A company that offers to reduce a client's energy costs, often with the cost savings being split with the client through an energy performance contract (EPC) or a shared-savings agreement.
Q5. What are the types of energy efficiency measures?
Ans. a) Active or efficient in-house management of energy efficiency through maintenance and housekeeping measures involves no or only very minimal investments. b) Replacement/Retrofit of selected equipment, which may require medium-size investments can be taken up; and c) The third and final type may be the Process Revamping or modification of entire manufacturing processes, which may require large-scale investments.
Q6. What types of Projects IREDA can finance?
Ans. IREDA finances the end user energy efficiency retrofit projects, DSM Projects taken up by utilities, projects promoted by Energy Service Companies (ESCOs) and power plants based on recovery of energy from exhaust gasses. IREDA also extend line of credits to financial intermediaries to onlend/ lease the energy saving equipment.
Q7. Has IREDA identified any specific energy efficiency measures for financing?
Ans. No. Any other equipment/ device/ system, which contributes to energy saving shall be considered by IREDA for financing.
Q8. Whether energy audit is must for availing loan from IREDA?
Ans. Yes (Except for the cases where established energy saving items such as CFL/T5 lamps etc. are being proposed.)
Q9. Whether IREDA accredit energy auditors for this purpose?
Ans. No. However, it is always better to employ the energy auditors accredited by other agencies such as Bureau of Energy Efficiency, PCRA etc.
Q10. Whether IREDA finances only renewable energy based energy saving measures?
Ans. No. Energy saving measures in plants based on both fossil fuels as well as renewable fuels are eligible for eligible for IREDA financing.
Q1. What is IREDA’s Project Financing Scheme for Solar energy sector?
Ans. Depending upon the technical and financial viability of the project, IREDA may finance upto 75% of the cost of the solar project.
Q2. What are the terms of financing solar energy projects including interest rate, repayment period and security?
Ans. For details w.r.t the terms, please refer to IREDA Financing Guidelines available (click here )
Q3. What documents are required to be submitted for availing loan from IREDA?
Ans. Application formats are available on the website of IREDA. The forms contains an Indicative list of documents which are required to be submitted along with the application forms. IREDA may ask for additional documents/information if required, for analysis of the proposal.
Q4. Does IREDA Finance Solar roof-top and Solar thermal projects?
Ans. For information, kindly refer to roof-top and sholar thermal schemes available on our website.
Q5. Where in India can solar energy projects be installed?
Ans. Solar energy projects can be installed anywhere in India. However, as different regions have different intensity of solar radiation, the output power from the solar project may vary from region to region.
Q6. Is there any MNRE subsidy available for setting up solar projects under IREDA’s finance?
Ans. IREDA is a financial institution and does not provide any subsidy. For details of subsidy available if any, please contact MNRE

Q1.

What is Small Hydro Project?

Ans.

A Small Hydro Project (SHP) is the development of hydroelectric power which harnesses energy from flowing or falling water from rivers, rivulets, artificially created storage dams or canal drops for generation of electricity. The capacity of SHP lies between 2 MW to 25 MW.

Q2.

Which are large hydro projects?

Ans.

Project capacity > 100 MW are termed as Large Hydro project.

Q3.

In India where can the Hydro project can be installed?

Ans.

Ministry of New & Renewable Energy (MNRE) has identified potential sites for small hydro projects. MNRE has also created a database of potential sites of small hydro wherein nearly 5,415 potential sites for projects up to 25 MW capacity have been identified. Moreover, database for potential sites of SHP are also maintained by State Nodal Agencies (SNA). May please refer to MNRE website www.mnre.gov.in

Q4.

What is the applicable rate of interest for the hydro project?

Ans.

The applicable rate of interest for hydro projects varies based on internal credit rating (from Grade-I to Grade-IV). For details, visit the website www.ireda.in

Q5.

Does IREDA provide finance to takeover hydro project?

Ans.

Yes, IREDA provides financing to takeover hydro projects as per IREDA’s financing guidelines, risk perception nature of industry and background of each case.

Q6.

Is there any MNRE subsidy available for setting up Hydro Projects?

Ans.

Yes, MNRE subsidy is available in the hydro sector projects upto capacity of 25 MW. The details of subsidy are available at MNRE website www.mnre.gov.in

Q7.

What is a Moratorium Period and what is the maximum moratorium period available in Hydro Sector?

Ans.

The moratorium period is the period during which borrowers repay only interest on loan and the maximum moratorium period available in Hydro Sector is up to one year

Q8.

What is the maximum construction period available in Hydro Sector?

Ans.

The maximum construction period for the small hydro projects varies based type of scheme, location etc. it is about 3-4 year.

Q9.

Does IREDA provide finance for medium & large hydro projects?

Ans.

Yes, IREDA provides finance for large hydro projects under consortium financing and the loan amount is up to 50% of the total project cost depending upon the viability of the projects, as per the financing guidelines of IREDA.

Q10.

What is the maximum repayment period available in Hydro Sector?

Ans.

The maximum repayment period for hydro projects is 20 years.

Q11.

What is the maximum percentage up to which IREDA provides financing for a hydro project?

Ans.

For hydro projects, IREDA exposure limited to 50% of the total project cost for the project >5MW & upto 70% for projects <5MW with specific conditions which are given in Financing Norms.

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