IREDA, which has the backing of the Indian government, has reached an agreement with the Sumitomo Mitsui Banking Corporation (SMBC) to mobilize JPY 28 billion (equivalent to ₹1,600 crore). This is expected to be used for raising funds for renewable energy initiatives, according to news reports.

The loan will have the option to increase funding if necessary through the greenshoe provision of JPY 12 billion. It will be a five-year external commercial borrowing (ECB) facility, which is not secured. It will enable IREDA to bolster its funding pool and improve access to capital markets globally.

The money raised will be used to support projects related to renewable energy and sustainable development, such as projects in solar energy and wind power. Notably, India is expected to raise funds in order to achieve its plans in renewable energy, with the aim of producing 500 gigawatts of power using renewable energy sources by 2030.

The transaction underscores the increasing investment appetite of foreign investors in Indian renewable energy projects, particularly from Japanese institutions. As per analysts, it is vital to have foreign funding available at a reduced cost in order to implement renewable energy projects in India.

According to IREDA, the facility was set up to be efficient and robust under the changing global financial climate. Also, this borrowing fits into the agency's objective of diversifying its funding and expanding its lending capacity in the renewable energy field.

The signing took place on March 30, 2026, with SMBC being the mandated lead arranger and bookrunner for the deal through its Singapore branch. This loan will be paid off upon maturity using the typical bullet repayment arrangement.

India's renewable finance requirements will increase tremendously in the coming ten years due to energy transitions as well as higher electricity requirements. Although foreign capital flows like these can offer immediate help, sustained success would require stability in policies and investor confidence.