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Norway keen to fund Solar Projects in India

Panchabuta has been tracking the various developments in the area of solar funding in India.

During the bidding for the first phase of the Jawaharlal Nehru National Solar Mission, ADB had expressed its concern regarding the funding of solar projects in India. Subsequently, the European Investment Bank had mentioned that they were keen on financing the solar projects in India.

This was followed by the visit of President Obama to India and the announcement of the signing of a number of deals worth about $175-m on clean energy  between Indian and US Companies, majority of them in the solar space.

During the same visit earlier this month, the US-India CEO Forum recommended the setting up of a $1 billion cleantech venture capital fund. This was followed by the announcement from US OPIC  that it will provide $100 mn for $300 mn South Asia Energy Fund of Global Environment Fund (GEF). The Global Environment Fund (GEF) is a private equity fund, that invests in businesses dedicated to clean technology, emerging markets, and sustainable forestry, with approximately $1 billion in aggregate capital under management.

Subsequently, Power Finance Corporation (PFC) of India announced the formation of a  subsidiary to focus on renewable energy projects and their funding.

All these announcements preceded the end of the bidding for the first phase of the National Solar Mission and the shortlisting of developers by NTPC Vidyut Vyapar Nigam Ltd. (NVVN).

This was followed by the launch of a market trading Renewable Energy Certificate mechanism that was announced by the government of India to improve and provide a market mechanism for carbon financing in India.

Since, the Asian Development Bank (ADB) a couple of days back signed a joint venture agreement with India’s NTPC Ltd. and Kyushu Electric Power Company of Japan to develop and operate 500 megawatts of renewable energy projects in India in the next three years.Under the joint venture agreement, ADB will invest up to 40 million dollars for a 25 percent stake in the company.

According to recent reports in the media (here and here), Norway seems to have joined the list of countries that are keen to invest in the solar space in India. According to the report, the Norwegian government was in talks with the ministry of new and renewable energy (MNRE) to increase funding solar village electrification projects in states like Madhya Pradesh and Jharkhand. Norway and MNRE are collaborating and co-funding a solar-based rural electrification project aimed at developing sustainable and scalable business models for accelerating large-scale roll-out of community solar power plants (CSPPs) in India.

The solar electrification project would soon be scaled up to around 1,000 villages in Madhya Pradesh. At present, pilots of solar electrification project are being run in about 30 villages of Madhya Pradesh, Uttar Pradesh, Jharkhand and Jammu and Kashmir. Most of these villages are in remote forest areas and the idea is to provide domestic lighting for these villages through a singular solar entity.

Norway has invested about a third of Rs 17 crore in the ongoing projects, while MNRE’s contribution stood at Rs 5.42 crore. Scatec – a Norwegian solar firm – has invested about Rs 1.1 crore in these projects.

Both Norway and MNRE are also considering setting up a 1.4 MW project involving 52 villages in Jharkhand. The proposed project of 1.4 MW would be connected to the existing grid by injecting solar power. The draft feasibility report for the Jharkhand project has already been done.

Panchabuta, will follow these announcements closely and see how they play out in the next year and help develop the rather quickly evolving eco-system in India.

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