# What short-term or project-specific loans does the Indian Renewable Energy Development Agency (IREDA) give renewable energy contractors and equipment suppliers? Canonical: https://senseible.earth/answers/ireda-short-term-and-project-loans-for-solar-contractors IREDA gives suppliers, contractors and manufacturers a short-term loan, repaid within 1 year of first disbursement, and a project specific funding (PSF) loan tied to one supply contract, generally repaid within 3 years. Both ask the applicant to confirm land, permit or grid connectivity. The PSF loan also needs a no-objection certificate (NOC) from working capital lenders. ## The two loans side by side - Short-term loan: meets immediate fund needs for project development, implementation or operation of renewable energy projects. Repaid within a maximum of 1 year from the first disbursement. - PSF loan: a short and medium-term loan for implementing a specific project or contract. Repayment is linked to the payment terms and milestones of the supply contract between the engineering, procurement and construction (EPC) player and the project developer, and generally does not exceed 3 years from first disbursement. - Short-term loan: the applicant must ensure the land permit, the developer's permission or power evacuation connectivity, or a combination, before disbursement. PSF loan: the applicant is to have the same, with no before-disbursement wording in the document. ## How PSF repayment is capped The terminal date for repaying a PSF loan is kept within the scheduled commercial operation date (SCOD) under the power purchase agreement (PPA) plus a maximum of 6 months. If the SCOD is extended later with the approval of the agency concerned, the terminal date may shift at IREDA's discretion, provided that was an original sanction condition. The loan amount is assessed from the cash flow of the specific contract. ## Security - First or pari passu charge on the project's movable and immovable assets, or - Margin money of at least 15% in a bank guarantee or fixed deposit receipt, plus one or more additional securities such as a pledge of shares, collateral property, corporate or personal guarantees, or a charge on revenue streams, contracts or supplier receivables. For existing IREDA borrowers or their group companies with a satisfactory payment record, at least 5% may be considered. - For PSF loans, a letter of credit or escrow of contract payments, and an undertaking from the project developer to deposit payments in a designated escrow account. ## Reporting and monitoring - Short-term loan: the applicant sends progress and utilisation certificates on a periodic basis, with the end-use certificate each quarter. IREDA may appoint monitoring agencies and carry out site inspections. - PSF loan: a lender's independent engineer (LIE) or concurrent auditor tracks progress and use of funds. The end-use certificate follows completion milestones set at appraisal. An NOC is needed from existing working capital lenders. The loan is also governed by any Reserve Bank of India (RBI) circulars issued from time to time. ## What is on hold IREDA's Guarantee Assistance Scheme for suppliers, manufacturers, EPC contractors and developers, which covers bid security, performance guarantees and advance payment guarantees, was put on hold under a board approval of 25 March 2026 and is reviewed periodically. It needs a track record of at least 50 megawatts (MW) of renewable projects in India. My reading: that makes it a scheme for large contractors, not small installers. ## Example: the PSF terminal date - Scheduled commercial operation date under the PPA: 31 March 2028. Plus 6 months: 30 September 2028. - First disbursement 1 October 2026. The general 3-year limit would end 30 September 2029. - The SCOD plus 6 months, 30 September 2028, is the firm cap the terminal date must stay within. The 3-year limit is only a general rule. The dates are examples. The document says repayment is generally within 3 years and the terminal date within the SCOD plus 6 months; the SCOD cap is the stated limit and the 3 years is a general rule. ## What Senseible does here Senseible reads fuel invoices and electricity bills into monthly records. It does not lend, and it does not prepare contract cash flow statements. - [KUSUM Component A and B loan conditions](https://senseible.earth/answers/ireda-kusum-component-a-and-b-loan-conditions) - [IREDA in-principle sanction letter](https://senseible.earth/answers/ireda-in-principle-loan-sanction) - [IREDA loan for a proprietorship or partnership](https://senseible.earth/answers/ireda-loan-for-proprietorship-or-partnership) - [Green loan readiness check](https://senseible.earth/green-loan-check) Sources: [IREDA, Financing Norms and Schemes, issue 35, updated up to 01.10.2026: short term loan assistance to suppliers and contractors; Project Specific Funding loans; Guarantee Assistance Scheme (on hold)](https://www.ireda.in/IredaWebPortal/documents/loan-products/financing-norms-01-10-2026.pdf) Last reviewed 2026-11-05. Terms are reissued with each issue of the norms. Check the current issue and ask IREDA whether a given applicant category is eligible.