India to get Rs 700 cr German loan for renewable energy projects

New Delhi, April 2 -- Germany will help India in renewable energy projects by giving a low interest loan of about 100 million Euros(about Rs 700 crore). An agreement for that has been signed by German Government owned development bank KfW with the Rural Electrification Corporation Ltd (REC), which is the nodal agency for the implementation of the Rajiv Gandhi Grameen Vidyutikaran Yojana, the national initiative for rural electrification.

A financing agreement has also been signed for a project development and capacity building grant of EUR 500,000 (approximately INR 3.5 crore)The reduced interest loan provided by KfW on behalf of the German Government will refinance sub-loans made by REC for renewable energy and energy efficiency projects in rural areas.

The grant component is intended to provide capacity building support to REC in order to enable the development of bankable projects and innovative business models for energy access at the tail ends of the electricity grid.

India has set ambitious goals to replace coal with renewable sources to meet power shortage in rural areas and also to reduce its share of carbon emmission. The agreements form part of the financial cooperation between India and Germany, the German Embassy said here today.

German Financial Cooperation is channelled through KfW, which acts as the implementing agency on behalf of the German Government. KfW German Development Bank is one of the largest banks in Germany and largest financier of renewable energy projects under development cooperation worldwide.

Germany and KfW have been longstanding partners of India. Since the 1950s, more than EUR 9 billion have been sanctioned by KfW, primarily in the fields of energy, financial sector development, health, and the protection of the environment and natural resources. Currently, about 15 energy sector projects with KfW loan commitments of more than EUR 1.5 billion are in various stages of execution in India. UNI NAZ RSA 1520 NNNN Published by HT Syndication with permission from United News of India.