How does the Indian Renewable Energy Development Agency (IREDA) bridge loan against pending energy bills work for a renewable energy seller?

IREDA lends up to 75% of energy bills a state utility has left unpaid for up to 6 months, capped at rupees (Rs) 20 crore, with at least Rs 1 crore of bills in a transaction. It is for existing IREDA borrowers, and the money must clear lenders' dues, not fund new spending.

Who can use it

• Existing IREDA borrowers, whether IREDA lends alone or with others, who sell energy to state distribution companies (DISCOMs), the Solar Energy Corporation of India, NTPC Vidyut Vyapar Nigam and similar utilities.
• The borrower must not have been declared a non-performing asset by IREDA or any lender in the consortium.
• IREDA says it may take the utility's track record into account.

How much, and for what

• Up to 75% of the invoice value pending, for a maximum of 6 months from the date of application, with a maximum facility of Rs 20 crore.
• A transaction covering a set of bills must be at least Rs 1 crore.
• The money may be used only to clear dues of the project's term lenders, and overdue amounts of working capital lenders on a pro rata basis, under the financing documents.

Steps and papers

1. Bring the bills you want the loan against.
2. For consortium or co-financed projects, bring a no-objection certificate from co-lenders saying utility payments against the bridge loan go first to IREDA's dues on it, and the rest follow the trust and retention account (TRA) mechanism.
3. Bring the utility's original acknowledgement of receipt of the bills.
4. Sign an undertaking that the bills are not in dispute and are eligible for payment.
5. Undertake that the money from the bills goes only into the designated TRA account and is applied to the bridge loan first.
6. IREDA then lends the eligible amount, and lenders' dues are cleared pro rata.

Repayment and the non-performing trigger

• The terminal date is 12 months from disbursement. If the utility has not paid by then, the promoter pays from its own sources.
• Interest is paid monthly by the borrower from its own sources. Principal is settled as utility payments arrive.
• If the outstanding amount is not paid by the borrower, it is classified as a non-performing asset.

Who it does not fit

My reading: a factory that uses its own rooftop solar power has no utility bills to pledge, so this facility is not for it. It fits owners of renewable energy plants that sell to a utility and are already IREDA borrowers.

Example: how the caps bite

• Unpaid bills Rs 4 crore: 75% = Rs 3 crore. That is under the Rs 20 crore cap and the bills are over Rs 1 crore, so Rs 3 crore can be lent.
• Unpaid bills Rs 30 crore: 75% = Rs 22.5 crore. The cap of Rs 20 crore applies, so the loan is Rs 20 crore.
• Unpaid bills Rs 0.8 crore: below the Rs 1 crore minimum transaction, so it does not qualify on its own.

Bill amounts are examples.

What Senseible does here

Senseible reads fuel invoices and electricity bills into monthly records. It does not lend, and it does not chase utility payments.

• IREDA refinancing: what a project must show
• IREDA in-principle sanction letter
• Third-party solar PPA conditions at IREDA
• Green loan readiness check

Sources: IREDA, Financing Norms and Schemes, issue 35, updated up to 01.10.2026: IREDA Scheme for Bridge Loans against pending Energy Bills

Last reviewed 2026-11-05. Caps and eligibility are reissued with the norms. Check the current issue and the utility's payment record with IREDA.