Top bankers demands priority lending to renewable energy sector

To meet the target of renewable energy production in the country, renewable energy sector included in priority sector lending, the top bakers observed
 “The new renewable energy policy, that will be enacted soon, shall also have provision for Renewable Generation Obligation (RGO). Non-compliance of RPO (Renewable Purchase Obligation) shall soon draw penalties,” said Piyush Goyal, Minister of State (IC) for coal, power, and new and renewable energy at session titled ‘Financing Renewable Energy: Success Strategies’ during the Renewable Energy Global Investors Meet & Expo (RE-INVEST) summit, New Delhi.
He said that the cost of renewable, except small hydro, has come down drastically over the last decade. “There is a need to socialise the cost of renewable energy through participation of all states, because currently only the states pushing for renewable energy are bearing the burden,” he adds.
Arvind Subramanian, India’s Chief Economic Advisor, said, “Role of public sector financing will assume paramount importance if India is to expand its renewable energy footprint in power generation over the next decade.”
However, the top bakers observed, to meet the target of renewable energy production in the country, renewable energy sector included in priority sector lending.
While pointing at the persisting problems in financing the renewable energy projects, Arundhati Bhattacharya, Chairperson, State Bank of India, pointed, “At the need of persistent policies, need to address issues in land acquisition, off-taking issues and management of the developers.” Naina Lal Kidwai, Chief Executive Officer and Country Head, HSBC India said, “We need to create a domestic green bond market which did trading worldwide worth $34 billion last year. India needs to participate and I also believe that priority sector lending should include renewables and better credit enhancement techniques.”
Patricia Loui, Member, Board of Directors, US EXIM Bank, spoke about her experiences in working with the Indian renewable energy sector and other developing nations. “The US EXIM Bank’s total exposure amounts to $7.2 billion dollars and India ranks second in total exposures after Mexico. Our portfolio in India has been growing due to a convergence of interests. The US Government has given us a mandate to lend which allowed us early leadership in financing projects in Gujarat and Rajasthan, which became a catalyst for other digital investments,” she said. She also emphasised on the need for a basic template for PPA that would be applicable to all states.

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