How long can an Indian Renewable Energy Development Agency (IREDA) loan run, and how long can I wait before the first repayment?
Outside solar, wind, transmission and hydro, an IREDA loan shall run no more than 15 years after construction and the pause on repayments, and be repaid within 80% of the project's useful life. The pause, called a moratorium, can run up to 1.5 years from the start of commercial operation (the norms say up to 6 months to 1.5 years).
Two clocks run at once
A moratorium is a pause on repayments, like a shop that lets you start paying once the new machine is earning. The norms of the Indian Renewable Energy Development Agency (IREDA) say it would be up to 6 months to 1.5 years from the date of commercial operation (COD) of the project. COD is the day the project starts running commercially.
Then the repayment period begins. It starts after construction and the moratorium.
How long the repayment period can be
- Solar, wind, transmission and hydro: the period is based on project cash flows, the offtake agreement (the deal with whoever buys your output) and the Debt Service Coverage Ratio (DSCR), a test that your earnings cover the instalments, explained on our loan share page. IREDA shall have the right to call option after 15 years of repayment. In plain terms, and in our reading, that is a right to ask for the rest to be repaid early. The total loan is to be amortised, meaning fully repaid, within 80% of the useful life of the project.
- All other sectors: depending on cash flows, the DSCR and the power purchase agreement period (the agreement under which a buyer takes your power for a set time), the repayment period shall not be more than 15 years, starting after construction and the moratorium. The total loan is again to be amortised within 80% of the useful life.
- If a specific policy or guideline sets a different period, that one is followed. The Access to Energy scheme sheet, for instance, sets a maximum of 7 years with a moratorium of 3 to 9 months. Biomass heating and pellet schemes also set their own, shorter periods: see our pages on the biomass steam heating loan and the biomass pellet plant loan.
Reading the two limits together
For sectors other than solar, wind, transmission and hydro, both limits apply, so our reading is that the shorter one decides. A machine with a 10 year life is capped by the 80% rule well before the 15 year ceiling.
Plan your first payment
- Ask when the moratorium clock starts: it counts from COD, not from sanction.
- Build the instalments into your cash plan from the first instalment date after the moratorium ends.
- Ask IREDA for the useful life it assumes for your equipment, since that sets the 80% cap.
Example: how the 80% rule bites
- Project A, a unit in a sector with no scheme sheet of its own, assumed to last 25 years: 80% of 25 = 20 years, but the 15 year ceiling is lower, so the cap is 15 years
- Project B, equipment assumed to last 10 years: 80% of 10 = 8 years, which is lower than 15, so the cap is 8 years
- A moratorium of up to 1.5 years can come before repayments begin. The norms do not say whether the moratorium counts inside the 80%. Our reading is that it may, so ask IREDA.
Example useful lives only. IREDA decides the life it assumes for your project.
What Senseible does here
Senseible reads fuel invoices and electricity bills into monthly records, so the energy your plant buys each month is on file when you plan the instalments. It does not set repayment terms. Senseible can pass verified records to financing partners. The partner decides. Nothing is promised.
- IREDA loan share: 70, 75 or 80 percent
- IREDA loan for a biomass steam supply plant
- IREDA loan for a biomass pellet plant
- What debt service cover banks want on a term loan
- Green loan readiness check
Last reviewed 2026-11-07. Limits are as printed in IREDA's financing norms updated up to 1 October 2026. The reading that the shorter limit decides, and the comparisons, are ours. So is the reading that the moratorium may count inside the 80%.