The Board of Directors of the Overseas Private Investment Corporation (OPIC) has approved $250m in financing to help India’s Infrastructure Development Finance Company (IDFC) expand its lending to renewable energy projects.

The IDFC will use the OPIC, the US government’s development finance institution, guaranty to provide much-needed additional lending to solar photovoltaic, wind power and energy efficiency projects, as well as ones that are aimed at reducing energy consumption and demand.

The OPIC financing will also support the US-India Partnership to Advance Clean Energy (PACE), designed to improve energy access and promote low-carbon growth through the research and deployment of clean energy technologies.

Despite sizeable growth over recent years, India’s renewable energy sector remains under-developed, primarily because of the inability of financial institutions to offer long-term lending. The lack of long-term funding options, especially given current financial market conditions, has made bi- and multi-lateral support critical.

“India’s renewable energy industry has grown by leaps and bounds these past few years, but in order for it to reach the next level and achieve the scale and sustainability we all wish to see, it must get long-term financing,” said OPIC president and CEO Elizabeth Littlefield.

Dr Rajiv Lall, managing director and CEO of IDFC, said, “Only about a sixth of India’s renewable energy resources have been tapped so far, leaving huge potential for future market growth. The OPIC facility will provide valuable support for India’s renewable energy strategy which aims not only to lower the carbon intensity of the country’s growth, but also to address the need for energy security.”

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