NEW DELHI: IREDA, a body under the Ministry of New and Renewable Energy, today signed a preliminary agreement with US Exim Bank for a $1 billion loan from the American entity to undertake development activities in the clean energy sector.

"A Memorandum of Understanding (MOU) has been signed between Indian Renewable Energy Development Agency (IREDA) and US Exim Bank with respect to cooperation in clean energy investment," an official statement said.

 The MoU was signed by K S Popli, Chairman & Managing Director IREDA, and Fred P Hochberg, Chairman and President, Export-Import Bank of the United States here.

This initial pact is intended to establish a framework for cooperation in the financing of credit worthy entities for renewable energy projects and to facilitate export of goods and services of US origin or manufacture in India besides various forms of collaboration between the IREDA & US-Exim Bank.

"US Exim Bank shall provide $1 billion medium and long-term guaranteed and/or direct dollar loans to finance US technologies, products and services utilised during commercial development activities within the clean energy sector by IREDA," the statement added.

The proposed credit facility carries no specific commitment on the part of IREDA and will depend on the import of US equipment to India and attractiveness of credit facility to the project developers in India, the statement said.

The US Exim Bank facility will be available for financing of imported US equipment besides loans for 30 per cent of domestic component.

The credit facility will be available for a repayment period of 18 years with the same fixed rate of interest. The other detailed terms and conditions shall be decided upon signing of MoU.

"Solar, wind, hydro and other renewable energy projects have been identified as priority areas of clean energy investment cooperation under this MoU," it added.