IREDA gets ‘Infrastructure Finance Company’ status from RBI

Source: The post is based on the article “IREDA gets ‘Infrastructure Finance Company’ status from RBI” published in PIB on 14th March 2023

What is the News?

The Reserve Bank of India(RBI) has granted an ‘Infrastructure Finance Company (IFC)’ status to Indian Renewable Energy Development Agency(IREDA).It was earlier classified as ‘Investment and Credit Company (ICC)’.

What is an Infrastructure Finance Company(IFC)?

IFC is a non-deposit accepting loan company which complies with the following:

– A minimum of 75% of the total assets of an IFC-NBFC should be deployed in infrastructure loans;

– The company should have a minimum net worth of Rs 300 crore,

– The CRAR of the company should be at 15% with Tier I capital at 10% and

– The minimum credit rating of the company should be at ‘A’ or equivalent of CRISIL, FITCH, CARE, ICRA, BRICKWORK or equivalent rating by any other accrediting rating agencies.

What is the Indian Renewable Energy Development Agency(IREDA)?

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How will the IFC status help IREDA?

With the IFC status:

-IREDA will be able to take higher exposure in Renewable Energy(RE) financing.

-It will also help the company to access a wider investor base for fund mobilization, resulting in competitive rates for fundraising.

-It will also increase the investors’ confidence, enhance the brand value and generate a positive outlook in the market.