IREDA (Indian Renewable Energy Development Agency) has achieved significant improvements in its asset quality, as highlighted by Pradip Kumar Das, the organization’s Chairman and Managing Director, at the RE-INVEST summit 2024 in Gandhinagar, Gujarat. Over the past four years, IREDA has successfully reduced its non-performing assets (NPA) from 7.2% in March 2020 to a remarkable 0.95% by June 2024.
Looking ahead, Das outlined the agency’s ambitious goal to grow its loan portfolio to around ₹3.5 lakh crore by 2030. He stressed the necessity of maintaining a balanced portfolio to uphold asset quality throughout this expansion. Currently, IREDA’s total book size stands at ₹62,000 crore. Within this, a notable 58% consists of low-margin, vanilla loans, while 18% is directed toward riskier emerging sectors.
The remaining 24% is allocated to government accounts, which are generally regarded as low-risk due to their historical absence of NPAs. Das highlighted that a substantial portion of IREDA’s growth has occurred in recent years, with a staggering 85% to 95% of its business generated within the last decade, and an impressive 70% of that growth achieved in just the last four years.
Addressing the increasing energy demands associated with India’s economic growth, Das pointed out that a 1% rise in GDP necessitates a corresponding increase of 1.25 times in energy production. This is particularly crucial as India is currently experiencing a robust growth rate of around 7%. To ensure high-quality project assets, he urged developers and financial institutions to prioritize thorough due diligence, ongoing monitoring, and meticulous appraisal processes.
Throughout its 37-year history, IREDA has sanctioned loans exceeding ₹2 lakh crore and has financed ₹1.31 lakh crore, underscoring its pivotal role in supporting renewable energy initiatives. Das also touched upon several emerging sectors in the energy landscape, such as green hydrogen, green ammonia, pumped storage, battery storage solutions, and electric mobility.
He observed that while solar and hydro power projects have become less daunting compared to two decades ago, enhancing private sector participation in renewable energy projects will hinge on resolving existing challenges. He emphasized the necessity of creating a business environment characterized by transparency, sustainability, and profitability.
At the same summit, Jörg Marius Ebel, the President of the German Solar Association, commended India’s remarkable advancements in solar energy deployment. He highlighted the potential benefits of integrating rooftop solar installations with other renewable energy solutions to optimize outcomes.
Ebel further stressed the critical need for a stable regulatory framework and robust investment to foster continued growth in the renewable sector. He characterized reliance on thermal power as outdated, particularly in light of the emerging trends in decentralized energy systems and effective demand-side management.
