The European Investment Bank, the lending arm of the European Union, will invest $200 mln (Rs 1,283 cr) into the Indian solar and power sector via a deal with Yes Bank in order to support the growth of renewable energy in the country.
The investment will be routed through a renewable financing program with Yes Bank and other financial institutions. The total size of the fund will $400 mln.
The 15-year USD 200 million EIB (European Investment Bank) loan was approved by the EIB Board of Directors on 12″ December and financial details of the new initiative are expected to be finalised in the coming weeks, Yes Bank said.
This will be the longest tenor borrowing facility for YES BANK in the international loan market, the Indian bank added.
“The new financing programme will streamline financing for a range of renewable energy projects being built and operated by leading Indian corporations and private sector developers,” Yes Bank said.
EIB is the largest lender for renewable energy investment worldwide. It has also ploughed funds into the Bangalore and Lucknow Metro systems to reduce dependence of conventional modes of transport such as cars.
Solar projects eligible for the new fund have already been identified in the states of Rajasthan, Telangana, Maharashtra and Karnataka and additional wind and Solar projects are currently being examined, Yes Bank added.
The initiative is the first EIB cooperation with YES BANK, and also the first support for renewable energy in Asia with a commercial bank.
The European Investment Bank is the World’s largest international public bank, and is owned by the 28 European Union member states.
“India and the European Union are committed to the Paris Agreement and tackling climate change. This new USD 400 million initiative demonstrates the shared vision and Commitment of both the European Investment Bank and YES BANK to increasing renewable energy power generation acroSS India,” said Andrew McDowell, European investment Bank Vice President.
“This new financing programme will make a significant Contribution to harnessing wind power and Solar energy to produce green energy, create thousands of jobs during Construction and strengthen technical and financial skills for the renewable energy sector to expand,” he added.
“With this transaction we remain well on track to achieve Our commitment to finance 5,000 MW of RE made at the 1 RE-INVEST Summit in Feb 2015 and is also synchronous with our COP 21 commitment of mobilizing USD 5 Bn for Climate Finance by 2020,” said Rana Kapoor, Managing Director & CEO, YES BANK.
Last year the European Investment Bank provided EUR 19.6 billion for climate related investment Worldwide.