Shares of Indian Renewable Energy Development Agency Ltd (IREDA) surged more than 5% on Wednesday, amid negative sentiments in the market, as the government-owned company announced a partnership with Indian Overseas Bank (IOB) for co-financing renewable energy projects in India.

IREDA’s shares hit an intraday high of Rs 125.60, 5.1% higher than its previous closing price on the National Stock Exchange (NSE). At 11:20 am, the stock was trading 3.6% higher at Rs 123.9.

In an exchange filing dated January 16, IREDA announced that the company signed a Memorandum of Understanding (MoU) with IOB for co-lending in Green Energy Financing. The MoU was signed by Dr R C Sharma, General Manager, IREDA and IOB’s Chief Regional Manager, Shri Anil Kumar. 

The press release by IREDA stated that said that the agreement sets the stage for co-lending and loan syndication for a diverse spectrum of renewable energy projects across the country.  

Through this partnership, IREDA aims to work towards fixed interest rates over a 3-4-year period for its borrowings and streamline loan syndication, underwriting processes and management of the Trust and Retention Account (TRA) for IREDA borrowers.

Pradip Kumar Das, Chairman & Managing Director of IREDA, said that this partnership builds upon IREDA’s prior agreements with other leading financial institutions to fund large-scale renewable energy projects. These include Bank of Baroda, Bank of India, Bank of Maharashtra, India Infrastructure Finance Company Limited and Union Bank of India.