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Husk Power Systemsa renewable energy company working on rural electrification, announced that it had secured debt financing of ₹310 million (~$4.2 million) from the Indian Renewable Energy Development Agency ( IREDA).
IREDA is a state-owned non-banking financial institution under the administrative control of the Ministry of New and Renewable Energy that promotes, develops and expands financial support for renewable energy projects.
In addition to the IREDA loan, the company plans to raise additional debt of $18 million in 2022 to accelerate project deployment while launching a Series D capital raise in the first quarter.
The company will use the loan to fund 140 microgrids in Uttar Pradesh and Bihar. IREDA’s loan to Husk represents one of India’s largest debt financings for rural microgrids to date.
Husk Power said it has built a strong pipeline of projects in India and Africa and expects to have around 1,300 grids in service by 2025 across multiple markets.
Manoj Sinha, Chief Executive Officer and Co-Founder of Husk Power Systems, said, “The IREDA funding demonstrates the Government of India’s vision to make microgrids an integral part of its net zero goal presented at COP26. The funding from IREDA will give Husk a much-needed boost to achieve our goal of expanding our microgrid fleet tenfold by 2025.”
Husk Power signed the Energy Compact with the United Nations on January 26, 2022, pledging to install 5,000 microgrids with one million connections by 2030 in India, Nigeria and other South Asian countries. South and sub-Saharan Africa. This was in line with the company’s goals set at COP26 to scale the rural energy economy and mini-grids in sub-Saharan Africa and South Asia by 2030.
Energy pacts are voluntary commitments by United Nations member states and non-state entities, such as corporations, regional and local governments, NGOs and others. These stakeholders commit to an Energy Pact that includes specific actions to support progress towards SDG7 (one of the 17 Sustainable Development Goals established by the United Nations General Assembly in 2015).
Last month, the Cabinet Committee for Economic Affairs approved the capital injection of ₹15 billion (~$201.27 million) into IREDA. The additional capital injection would help IREDA lend ₹120 billion (~$1.61 billion) to the renewable energy sector, easing the need for debt for additional capacity of 3.5 GW to 4 GW.
Harsh is a journalist at Mercom India. Previously with Indian Express, he covered mainstream stories. He holds a Masters in Journalism from the Symbiosis Institute of Media and Communication, Pune.
More articles from Harsh Shukla.
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