KfW signs $228 loan agreement with REC

KfW, a leading German financial institution, has signed a €200 million (~$228.15 million) loan agreement with India’s Rural Electrification Corporation Limited (REC), KfW signed the agreement on behalf of German Federal Ministry for Economic Cooperation and Development (BMZ).

The REC will fund renewable energy project developers in the form of low-interest loans. These loans will be supplemented by counterpart contributions of up to 30 percent from the borrowers as well as contributions from other banks. The funds provided will be leveraged by the private sector.

The overall investment is expected to be €285 million (~$325.12 million) and will also be a part of the German-Indian solar partnership.

KfW funds will provide a credit line for 200 MW of capacity, saving up to 285,000 tonnes of carbon emissions each year. This new source of capacity will also be able to supply power to around 270,000 homes.

The German bank will also provide a complementary grant of €1 million (~$1.14million) to implement an environmental and social management solution. The Mercon reportd.