Speaking on “Green Taxonomy & Climate Financing,” Shri Das emphasized that defining renewable energy technologies as “green” is essential to build investor confidence and ensure climate finance flows to genuine green projects. “By clearly defining ‘green,’ India can align with global standards and avoid misallocation of funds,” he said.

Shri Das proposed that India’s Green Taxonomy cover the entire renewable energy value chain- from manufacturing electrolyzers, solar PV modules, and EV batteries to renewable energy generation, smart grids, and equipment recycling. He noted that this framework would significantly boost investor confidence in India’s growing renewable energy sector.

CMD further elaborated on the role of IREDA’s wholly owned subsidiary in GIFT City. By raising and disbursing funds in foreign currency, IREDA’s subsidiary will provide significant cost savings in hedging for export-oriented manufacturers, particularly in sectors such as green hydrogen, renewable energy component manufacturing, and captive projects.

He emphasized the importance of the “DAS” principle for the rapid advancement and financial viability of renewable energy projects. The “DAS” principle stands for Discipline of investors, Attitude of lenders, and Simplification of policies by central-state governments, CEA etc., as well as regulatory bodies like RBI and SEBI. Shri Das pointed out that by adopting this principle, IREDA has realigned its processes to align with the nation’s goal of achieving 500 GW of non-fossil energy by 2030. This realignment by the company has led to significant improvements and Hockey Stick approach growth over the past four years.

Shri Das also underlined IREDA’s request to the Government of India for inclusion in the list of companies eligible to raise funds through bonds under Section 54EC of the Income Tax Act, aiming to further reduce borrowing costs for renewable energy developers.

The panel discussion also included Mr. Deepak Agrawala, Senior Executive Vice President, Avaada Group; Mr. Kailash Vaswani, Group CFO, ReNew; Mr. Pritesh Vinay, CFO, JSW Energy; Mr. Jitendra Singh, Head of Engineering & Technology, Acme; and Ms. Kumi Kitamori, Deputy Director Environment, OECD. Mr. Umang Shah, Managing Director and Partner of Boston Consulting Group, moderated the session.

In his address on “Green Financing, Climate Risks and Sustainable Taxonomy: Way Forward,” Shri Das emphasized that IREDA’s focus extends beyond just improving its Net Interest Margin (NIM). The company is evenly dedicated to encouraging a healthy ecosystem that supports the cohesive growth of renewable energy across India. He noted that the global financial community increasingly views the green sector as a significant business opportunity, yet the lack of a Green Taxonomy remains a barrier to broader green investment.

Shri Das outlined several initiatives aimed at reducing borrowing costs, including a significant proposal for IREDA’s inclusion under Section 54EC of the Income Tax Act. This inclusion would grant capital gains tax exemptions on bonds issued by IREDA, thereby facilitating access to lower-cost funds, benefiting the entire green energy sector.

He also informed the audience that IREDA had submitted a draft Green Taxonomy to the Ministry of New & Renewable Energy (MNRE) one and a half years back. As announced by the Hon’ble Finance Minister in her budget speech, Climate Taxonomy is poised to increase the availability of capital for climate adaptation and mitigation projects. Shri Das stated that the implementation of this Green Taxonomy would not only accelerate India’s journey towards its Net Zero goals but also enable the nation to attract substantial global green funding by providing a clear list of activities covered under the taxonomy.

In a significant move towards promoting green investment, CMD, IREDA suggested allocating up to 5% of Assets Under Management (AUM) from domestic pension and insurance funds into Green Bonds. This strategic suggestion aims to strengthen bond markets and attract increased global and local investments in the green sector.

Shri Das also pointed out that with 27% of its workforce being women, IREDA most likely has the highest female employee participation among CPSEs, underscoring the company’s commitment to inclusive growth. He also mentioned that the company is exploring the feasibility of offering financing to retail and small and medium enterprises (SMEs) in the renewable energy sector, areas that currently lack sufficient attention.