The CAG performance audit on Indian Renewable Energy Development Agency Limited (IREDA) placed before Parliament on Thursday claimed that it has failed to sustain its position as a leading financial institution in the renewable energy sector.
“IREDA’s share in the total commissioned capacity of the country, which was 52.83 per cent in the beginning of the Tenth Five Year Plan (2002-07) period dipped to 19.21 per cent at the end of the Tenth Five Year Plan and further to 7.66 per cent at the end of the Eleventh Five Year Plan. Thus, IREDA was not able to sustain its position as a leading financial institution in the renewable energy sector,” the CAG report reads.
Comparing IREDA with other power-sector financing companies, the national auditor said, “The gross NPA to total loans in 2008-09 was 13.34 per cent, and thereafter, showed a decreasing trend and reduced to 3.86 per cent in 2012-13, except in 2011-12, in which it increased marginally to 5.46 per cent. However, the percentage of NPAs was much lower (ranging from 0.02 to 1.04 per cent during the same period) in case of other power-sector financing companies such as Rural Electrification Corporation Limited (REC) and Power Finance Corporation Limited (PFC).”
It was learnt that of the 42 cases selected by auditor, it was observed that in 17 cases (40 per cent), the IREDA had deviated from norms prescribed in the financing guidelines for credit exposure limits, creation of mortgage, promoters’ contribution, conduct of inspections, etc.
Criticising IREDA’s One-Time Settlement (OTS), the report says, “The OTS policy was an ongoing scheme, operating continuously without a fixed timeframe, and therefore, was likely to promote a culture of non-payment among its borrowers. Other power-financing companies like REC and PFC did not have running OTS schemes.”