# Can the Indian Renewable Energy Development Agency (IREDA) refinance the term loan on my commissioned project, and what must the project show?

Canonical: https://senseible.earth/answers/ireda-refinancing-policy-for-commissioned-projects

IREDA has a refinancing policy for commissioned projects that are standard assets with every lender and not in default. Projects under two years old need an external rating of at least A-. Older ones need investment grade and a past debt service coverage ratio (DSCR) of at least 1.05 for solar and wind.

## Who the policy is for

- The entire project must have reached its commercial operation date (COD) when the application is made.
- The entity must not be in default to any bank, financial institution or non-banking financial company, IREDA included.
- The loan must be a standard asset in the books of all lenders on the date of application.
- Average and minimum DSCR for the new loan period must meet the limits in IREDA's guidelines. The document adds that fundamental viability is established from other financial and non-financial parameters showing capacity to service and repay over the tenor.

## Two tracks by project age

- COD less than 2 years ago: minimum external rating of the project or portfolio of A-. Financial projections use generation after a stabilisation year of one year. If COD is under a year ago, estimated generation from the resource assessment is used.
- COD more than 2 years ago: minimum external rating of investment grade. Projections use average generation of up to the last 5 years, leaving out the first year of operation. Past year-on-year DSCR for up to the last 5 years must be at least 1.05 for solar and wind projects, and at least 1.10 for other projects.

## What the policy will not do

- IREDA will not consider this scheme where the borrower seeks fresh help from IREDA to prepay or replace a facility IREDA itself sanctioned.
- Refinancing another lender's loan on a project where IREDA is already a lender can be considered as a new business proposal under this policy. IREDA then carries out an integrated rating or re-rating, and any better rating applies to the original and the additional debt.
- Repayment is set from the project's life cycle and cash flows. Normally there is no moratorium on repayment or interest.

## Papers and consents

- Consent from the lenders whose debt is being refinanced, before disbursement begins. The document says this may be obtained under the terms of the Common Loan Agreement (CLA).
- Confirmation of the outstanding balance from each bank or institution being refinanced, before disbursement begins.
- Compliance with every condition for refinancing in the CLA, the terms of sanction and the trust and retention account agreement.

## Why the document defines financial difficulty

The policy prints definitions of restructuring and financial difficulty, in the style of the Reserve Bank of India (RBI) rules. A default counts as an indicator of financial difficulty whatever the reason, and so do a probable default without a concession, cash flows judged insufficient to service all debt, and non-performing status. My reading: a refinancing that looks like a rescue of a struggling borrower is a different matter from this policy.

## Example: two tests for a 5-year-old solar plant

- Generation: year 1 is left out. Years 2 to 5 are 2,000 + 1,950 + 2,050 + 2,000 = 8,000 megawatt hours (MWh). Average = 8,000 / 4 = 2,000 MWh a year.
- Past DSCR by year: 1.12, 1.08, 1.06, 1.10, 1.09. Every year is at least 1.05, so the solar test passes.
- Past DSCR by year: 1.12, 1.08, 1.04, 1.10, 1.09. Year 3 is below 1.05, so the test fails.

Generation and DSCR figures are examples. The document says "Past year on year DSCR of upto last 5 years to be minimum 1.05". This page reads that as each year, not only the average. Confirm with IREDA.

## What Senseible does here

Senseible reads fuel invoices and electricity bills into monthly records. It does not lend, rate projects or negotiate with lenders.

- [Can a green loan refinance a solar plant I already paid for?](https://senseible.earth/answers/green-loan-refinance-existing-solar-plant)
- [IREDA bond guarantee: who can use it](https://senseible.earth/answers/ireda-credit-enhancement-guarantee-for-solar-wind-bonds)
- [IREDA in-principle sanction letter](https://senseible.earth/answers/ireda-in-principle-loan-sanction)
- [Green loan readiness check](https://senseible.earth/green-loan-check)

Sources: [IREDA, Financing Norms and Schemes, issue 35, updated up to 01.10.2026: policy for refinancing of loan](https://www.ireda.in/IredaWebPortal/documents/loan-products/financing-norms-01-10-2026.pdf)

Last reviewed 2026-11-05. Ratings, DSCR floors and consents are reissued with the norms. Ask IREDA for the current issue. The document's own text for 'COD more than 2 years' is printed with some lettering errors; the thresholds above are as read.