The Union Cabinet that was led by Prime Minister Narendra Modi on Wednesday approved the infusion of Rs 1,500 crores in the Indian Renewable Energy Development Agency Limited (IREDA), a public sector unit (PSU) under the Ministry of New and Renewable Energy, in order to enable it to lend loans up to Rs 12,000 crores to the renewable energy sector.

"The Union Cabinet has approved a scheme for the grant of ex-gratia payment of difference between compound interest and simple interest for six months to borrowers in specified loan accounts," news agency ANI tweeted. 

Addressing the press conference after the cabinet meeting, Union Minister Anurag Thakur said, "Indian Renewable Energy Development Agency Limited plays a big role in the field of renewable energy. This agency was established to finance renewable energy. Its portfolio has increased from Rs 8,800 crore to Rs 28,000 crore in the past 6 years."

"But according to RBI, the loan can only be lent on 20 per cent of the net worth. The net worth of IREDA is Rs 3,000 crore. It can lend loans up to Rs 600 crore only," the Union Minister added.

Thakur further said that the decision would enable IREDA to lend loans up to Rs 12,000 crore in the renewable sector.

"The decision has been taken of equity infusion of Rs 1,500 crore in the Indian Renewable Energy Development Agency. The benefit that it would lead to is that with the infusion of increased equity, IREDA would be able to lend loans up to Rs 12,000 crore in the renewable sector," Thakur said.

The Union Cabinet has also approved the extension of tenure of the National Commission for Safai Karamcharis for three years beyond 31st March 2022.