Fund approved for IREDA: Cabinet

• Recently the Union Cabinet has approved an investment of Rs 1,500 crore in the Indian Renewable Energy Development Agency (IREDA).
• This will enable IREDA to lend Rs 12,000 crore to the renewable energy sector.
• Earlier ‘Whistleblower Portal’ was launched by IREDA as a part of ‘Vigilance Awareness Week 2021’.

Importance of Fund:

• This equity investment will help create about 10,200 employment opportunities and reduce CO emissions by about 7.49 million tonnes.
• An additional equity investment of Rs 1500 crore by the Government of India will enable IREDA.
• Facilitating additional capacity of 3500-4000 MW in the Renewable Energy (RE) sector by providing a loan of about Rs 12000 crore.
• It will better contribute towards the goals of the Government of India by helping in financing in the field of RE to increase its net worth.
• Improving the capital-to-risk-weighted asset ratio (CAR) to facilitate its lending and lending operations.
• CRAR, also known as CAR (Capital Adequacy Ratio), is important to ensure that financial organizations have enough to absorb a fair amount of losses before they become insolvent.

IREDA:

• It is a Miniratna (Category 1) company functioning under the administrative control of ‘Ministry of New and Renewable Energy’, Government of India.
• Its function is to encourage projects related to new and renewable energy sources and to provide financial assistance to them for development.
• It has been notified as a ‘Public Financial Institution’ under Section 4A of the ‘Companies Act, 1956’.
• It has been registered as a ‘Non-Banking Financial Company’ under the rules of ‘Reserve Bank of India’.
• It was incorporated as a Public Limited Company in the year 1987 as a ‘Non-Banking Financial Institution’.
• Its objective is to promote, develop and provide financial assistance to projects related to new and renewable energy sources.

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