The Union Cabinet chaired by Prime Minister Narendra Modi has approved the proposal for raising Rs. 2,360 crore through bond sale, to fund renewable energy developments projects in the current fiscal year.
The bonds will be raised by the Ministry of New & Renewable Energy (MNRE) through the Indian Renewable Energy Development Agency (IREDA) during the 2017-18, a statement released by the ministry said.
The move is part of the government's 2016-17 financial budget proposal in which it allocated Rs. 4,000 crore ($617.81 million) to IREDA to issue government-serviced bonds.
Out of this allocation, IREDA had raised Rs 1,640 crore as per the requirement of MNRE.
The fund raised by MNRE will be used in approved government schemes. The fund will help solar parks, the Green Energy Corridor, viability gap funding for solar projects, investments in grip plants, corporations and autonomous bodies.
The government had declared additional finance mobilisation of Rs 31,300 crore bonds through NHAI, PFC, REC, IREDA and IWAI in the budget for FY 2016-17.
Prime Minister Modi has set a target of raising India's renewable energy generating capacity to 175 gigawatts by 2022, requiring about $100 billion in investments, as part of the fight against climate change by the world's third-biggest greenhouse gas emitter and to supply power to each of its 130 crore people.