India to receive 200 bn euro loan from EU

Berlin, Aug 30 (PTI) India will receive a loan of 200
million euros from the European Union to finance private
sector projects for the development of renewable energy
resources.
The EU's assistance comes as part of its "strategic
partnership" with India and will be made available by the
European Investment Bank (EIB) to ICICI Bank, India's largest
private bank, in the first-ever cooperation between the two
financial institutions.
It is intended to provide long-term financing for
investments on a number of electricity generating projects,
especially in the areas of solar photovoltaic, biomass and
onshore wind power by private companies, thereby making a
contribution to India's efforts to reduce greenhouse gas
emissions, the EIB said on Monday in a press statement.
The loan is being provided under the EIB's Energy
Sustainability and Security of Supply Facility (ESF), a 4.5
billion euro programme designed to reinforce the EIB's goal of
promoting renewable energy and energy efficiency in non-EU
countries.
This is the first cooperation between the long-term
financing institution of the 27-nation EU bloc and India under
the ESF programme, the statement said.
The ESF is used when the bank does not need a credit
guarantee from the EU because the recipients are
investment-grade countries or where appropriate security can
be provided.

In addition to the ESF, the EIB has an external lending
mandate to implement the EU's lending operations outside the
bloc as part of its cooperation with those countries and since
1993, the bank has carried out four successive lending
operations for Asia and Latin America.
Under the current mandate, covering the period between
2007 and 2013, the EIB is authorised to lend up to 3.8 billion
euros for financing projects that contribute to the avoidance
or reduction of greenhouse gas emissions through foreign
direct investment or technology and know-how transfer.
The lion's share of the funds, amounting to 2.8 billion
euros, are earmarked for Latin America, while the Asian region
will receive 1 billion euros.
The EIB's loan for India will "support the EU-India
strategic partnership, which provides for cooperation in
curbing climate change", the statement said.
The projects eligible for financing will bring economic
benefits to the region by enhancing the production of energy
from renewable resources, reducing the costs for imported
energy, expanding the use of domestic resources and curbing
greenhouse gas emissions and other airborne pollutants.
"The EIB will ensure that the projects are economically
and financially viable, technically adequate and in compliance
with the bank's environmental and social requirements," the
statement said.