IREDA Secures JPY 26 Billion Loan from SBI Tokyo to Boost Renewable Energy Projects

The Indian Renewable Energy Development Agency Ltd (IREDA) has secured JPY 26 billion through external commercial borrowings (ECB) from the State Bank of India (SBI), Tokyo Branch.

The funds will be used to accelerate renewable energy projects across India. The agreement, signed on March 27, 2025, includes a Green Shoe Option of JPY 10 billion, providing IREDA with additional financial flexibility to support its sustainability goals.

5-Year Loan to Support Renewable Energy Growth

The 5-year unsecured loan will finance and promote various renewable energy initiatives, aligning with India’s long-term sustainability objectives.

IREDA emphasized that the transaction with the SBI Tokyo Branch is conducted at arm’s length, ensuring transparency and maintaining no shareholding implications.

The move is part of IREDA’s broader strategy to diversify its funding sources and enhance international financial partnerships to drive India’s renewable energy growth.

RBI’s Revised Priority Sector Lending Guidelines

This development follows recent changes announced by the Reserve Bank of India (RBI) to its Priority Sector Lending (PSL) guidelines, which impact the renewable energy sector.

Under the revised framework, the RBI has expanded the classification criteria for renewable energy-related loans under PSL.

Additionally, bank loans up to ₹35 crore for renewable energy-based power generators and renewable energy-based public utilities will now qualify for Priority Sector Lending.

IREDA Stock Performance and Financial Results

On April 1, 2025, IREDA shares were trading 0.75% lower at ₹159.40 apiece on the BSE, nearing its day’s low. The stock opened at ₹163 and hit an intraday high of ₹166.77. Year-to-date, the scrip has corrected by more than 28% and is down nearly 50% from its 52-week high of ₹310.

In terms of financial performance, IREDA reported a strong 26.8% year-on-year (YoY) growth in its net profit (profit after tax) for Q3FY25, reaching ₹425.4 crore compared to ₹335.5 crore in the same period last year. Sequentially, its PAT increased by 10% from nearly ₹388 crore in Q2FY25, showcasing steady financial growth despite stock market volatility.

Conclusion

With this new funding from SBI Tokyo, IREDA is poised to strengthen India’s renewable energy landscape. The ECB loan, along with RBI’s revised PSL framework, reflects a growing focus on sustainability and clean energy investments.

Despite recent stock fluctuations, IREDA’s financial growth and strategic initiatives reinforce its position as a leading financier in the green energy sector.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions.

Investments in the securities market are subject to market risks, read all the related documents carefully before investing.