I think it’s a very good initiative, but we have to make all such investors understand the country. So they have to look at long term viability, which means they should also keep a proportion for manufacturers in such funding. They should fund not only the assets but also the supply chain. But it’s a big plus point in any case. More such funding coming in goes to areas that will increase the demand and that demand is finally going to come to us. So it’s a huge positive step I would say.
Well, it’s a great initiative that both the European Investment Bank and SBI have taken to promote wind energy and hence utilise the most of it. However, India will still face energy shortages in the future due to the spike in energy insecurity and prices. To address that, India must go beyond just tapping wind and solar energy as many players are already working on it. We should also focus on other sources of renewable energy generation and thus reduce the constant utilisation of non-renewable energy such as coal and crude oil. This will also help us head towards achieving a sustainable path of energy development, which is one of the major requirements as of now for India.
Any foreign intervention is good, but we have to see the actual implementation of those agencies and see how it goes.
India’s solar sector has unlimited opportunities. The major hurdle till date is the smooth financing of the projects in this field. However, things have changed drastically over the last two to three years for the betterment of this sector. The cost of setting up a solar plant has come down significantly. Thanks to the growing awareness and concern towards climate change, lot of investments has also poured into this sector. Consequentially the prices of solar cells, modules and BOS (Balance of Systems) have been on a downward trend for some time now. But still, financing of Solar MW projects remain a thorny issue with many developers. Even today, after such a steep decline in the prices of cells etc, the cost per MW is higher than other means of power. The significant new support from the European Investment Bank will strengthen expansion of clean energy generation across India. Investment in new solar energy and wind power schemes will improve access to clean energy for millions of Indians and create many new jobs. The support for renewable energy investment across India will benefit from the European Investment Bank unique technical and financial experience. This initiative with IREDA demonstrates how European engagement in India will benefit millions of people.
I think that’s a welcome move. Since the cost of money is very high in India it’s highly feasible to have that kind of projects. CAPEX is mostly a cash issue for many companies and industries, and if we don’t have such initiative we can’t go ahead. If you follow the BOOT model in a big way you need a chief financing. And I think the European Bank’s initiative will help India’s renewable energy drive.
Renewable is a very capital-intensive business. It requires very heavy upfront investments, and the running costs are huge. So it’s great news that multinational agencies such as World Bank and European Investment Bank have agreed to finance these kinds of initiatives. And it’s really good to see that these banks have agreed to finance because, as a developing country, we don’t have those kinds of resources that a plan of 175 Giga watts of renewables and 30 per cent share of renewables can be self-financed. We need such multinationals, which can fund these.