The Cabinet Committee on Economic Affairs (CCEA), chaired by Prime Minister Narendra Modi, has approved the listing of IREDA, a Central Public Sector Enterprise (CPSE) under the Ministry of New and Renewable Energy (MNRE). It funds renewable energy and energy efficiency projects.

According to media reports, IREDA will enter the capital market in the upcoming financial year (2023-24).

This will help raise funds for the Indian Renewable Energy Development Agency (IREDA) by issuing new shares. The Department of Investment and Public Asset Management (DIPAM) will facilitate the listing process.

“This decision supersedes the earlier decision taken by the CCEA in June 2017 to allow IREDA to issue 13.90 crore new share capital at Rs 10 each to the public through an IPO on a book-entry basis. An immediate decision is needed as government recapitalises after Rs 1,500 crore capital injection in March 2022,” according to an official statement dated March 17.

The IPO will help unlock the value of government investment and allow the public to acquire and benefit from a stake in a state asset. Furthermore, it will help IREDA raise part of its capital requirements to meet growth plans without relying on public finances. It will improve governance by enhancing market discipline and transparency in listing requirements and disclosures.

IREDA, currently a Mini-Ratna (Type I) CPSE wholly owned by the Government of India, was established in 1987 to finance renewable energy (RE) and energy efficiency (EE) projects in India. It is registered as a Non-Banking Financial Company (NBFC) with the Reserve Bank of India (RBI).

The government set a target of 175 GW of installed RE capacity by 2022 and 500 GW by 2030, in line with commitments made under the Paris Agreement on Climate Change as part of its Nationally Determined Contributions (NDCs). IREDA has a vital role to play in achieving renewable energy targets.

“In line with the GoI’s renewable energy targets, IREDA’s implementation and operation of renewable energy/energy efficiency projects under its business plan will contribute to the creation of direct and indirect employment opportunities for skilled and unskilled labour,” the statement read.