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Global Environment Friendly (GEF) Scheme

Global Environment Friendly (GEF) Scheme

Global Environment Friendly (GEF) Scheme

The Ministry of New & Renewable Energy (MNRE) in partnership with the United Nations Industrial Development Organization (UNIDO) and IREDA (Indian Renewable Energy Development Agency) has launched the Global Environment Friendly scheme to significantly promote the adoption of the Concentrated Solar Thermal (CST) technologies. The ongoing planned national and international programs to promote and support the increased solar energy use for industrial heat in India is the ‘driving solar support initiative’ of India. This project was launched as Jawaharlal Nehru National Solar Mission (JNNSM) by the Ministry of New and Renewable Energy (MNRE) which is an initiative under the Government of India.

This Global Environment Friendly (GEF) scheme has been created to contribute to the GEF Climate Change Strategic Objectives, which include:

  • promotion of investment in Renewable Energy technologies by transforming the Indian market through investment
  • development of required financial instruments
  • development of technical specifications
  • market demonstration
  • capacity building and contributions to establish a favourable policy and regulatory environment

The project will, therefore, be expected to assist in the commercialization of solar heat technologies in India.


The GEF-UNIDO-MNRE project is an innovative financing scheme to significantly promote the adoption of the Concentrated Solar Thermal (CST) Technologies for the process of heat applications in the industrial sectors. It also aims at creating the necessary environment for increasing penetration and the scaling up of CST Technology in India through this innovative financing mechanism.

Benefits of Loan Scheme

  • Soft Loan: A Soft loan is made available at a low rate of interest for 7 years inclusive of the 1-year moratorium.
  • Single Window for multiple funding: A single-application to IREDA for MNRE subsidy, IREDA Soft Loan and Bridge Loan has been implemented under this project.
  • Simpler processing and documentation: Composite loan application forms for Soft Loan and related Bridge Loans have been implemented under this project.

Scheme Highlights

The scheme provides an indicative cost-structure offering a minimum of 25% as promoter’s contribution, 45% as a soft loan (Part A) and a Bridge Loan against sanctioned 30% MNRE subsidy on benchmark costs (Part B).

Part A: Soft Loan from IREDA

Rate of Interest for Soft Loan 7% After considering UNIDO interest subvention
Repayment Period for Soft Loan 7 years 1-year moratorium + 6 years repayment

 Part B: Bridge Loan against MNRE subsidy

Rate of Interest for Bridge Loan 12% The rate is applicable until the project is commissioned will be taken into consideration. On commissioning – the MNRE subsidy will be passed on to the project, and the bridge loan will be closed.


Any entity/categories as per IREDA guidelines that can set up a solar thermal heating/cooling/tri-generation project is eligible to apply for this scheme.

General Applicant Eligibility Norms

Some of the eligible Entities/Categories as per the IREDA norms will include the following:-

  • Private Sector firms/companies.
  • Central Public Sector Undertakings (CPSUs).
  • State Utilities/Gencos/Discoms/Transcos Corporations.
  • Joint Sector Companies.

Applicants that are registered in India under any of the above categories are eligible to apply for financial assistance except for the following:

  1. Societies, Individuals, Proprietary concerns, Trusts, and Partnership firms (other than Limited Liability Partnerships, LLPs). They are eligible to be considered for financing only if they provide Bank Guarantee/Pledge of Fixed Deposit Receipt (FDR) issued by the Scheduled Commercial Banks as described in the RBI Act for the entire loan.
  2. Loss-making applicants and/or applicants with accumulated losses, as per the audited Annual Accounts of the immediately preceding financial year of operation, can only be considered for financing if they provide security of Bank Guarantee/Pledge of FDR issued by the Scheduled Commercial Bank as described in the RBI Act for the entire loan.
  3. Applicants who are in default of payment of dues to Financial Institutions, IREDA, Banks, and/or NBFCs.
  4. Applicants/Companies and/or Promoters of the applicant company who are/have:
    • Defaulted in payment of IREDA dues and/or defaults of other banks/FI.
    • Classified as wilful defaulters as defined by RBI/ are classified by other FIs.
    • Had availed any OTS from IREDA and/or, from any other Banks/FI.
    • Convicted by the court for criminal/economic offences or under any national security laws.

5. Greenfield Projects involving second-hand equipment and related machinery.

Minimum Loan Amount

The minimum loan eligibility from IREDA is INR 50 lakhs.

Disbursement Schedule

The following disbursement of the loan is applicable for both Part A (Soft Loan) and Part B (Bridge Loan)




1st instalment 30% of the loan amount On signing of the loan agreement and inflow of minimum 30% share of promoter’s contribution
2nd instalment 30% of the loan amount The inflow of additional 60% share of the promoter’s contribution and after delivery of all equipment at the site
3rd instalment 30% of the loan amount The inflow of minimum 90% share of promoter’s contribution, On final installation of CST equipment at the location.
4th instalment 10% of the loan amount On completion of commissioning, testing and inspection and utilization of 100% of the promoter’s contribution.


Guarantee & Security

  • As per the norms set by IREDA.
  • Performance guarantee from the supplier for a period of 7 years or until the completion of the repayment of loan and payment guarantee from the beneficiary.
  • The promoter should give an undertaking that in case non-release of Capital Subsidy, the company will bring in equity to repay the loan taken from IREDA.

Fees & Charges

A rebate of 20% will be provided to the beneficiary if the loan agreement is signed within the first 60 days of the sanction of loan.

Processing Fee


Registration Fee

Up to 1 crore INR 10,000 (plus other service tax and education cess as applicable)
Above 1 crore INR 30,000 (plus other service tax and education cess as applicable)

Front-end Fees

The borrowers have to pay front-end fee as per the list below after the loan sanctioning letter and before signing of the loan agreement.

Loan slab

Front-end Fee

Up to 5 crores 0.50% of the total loan amount
Above 5 crores 1.0% of the total loan amount

Other Guidelines


The borrowers will ensure insurance coverage of all the works and equipment during the construction and also during the operation. The insurance cover should remain operative until the loan is fully repaid.