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Foreign Direct Investment (FDI)-Renewable Energy-India witnesses 105% rise in 2010:India attractiveness survery by Ernst & Young

As Panchabuta has earlier indicated, the government had said in November last year that Foreign Direct Investment (FDI) in renewable energy sector has shown an upward trend and investment in the sector in 2009-10 has been very attractive.

During 2006-07, 2007-08, 2008-09 and 2009-10, the investment into the sector was USD 2.11 million, USD 43.15 million, USD 85.27 million and USD 497.91 million respectively.

According to a recent study on India attractiveness survey by Ernst&Young  Foreign Direct Investment (FDI) in Renewable Energy in India witnessed a 105% rise. Wind energy is the fastest growing renewable energy sector and the FDI inflow in the sector has been increasing over the years. The Generation Based Incentives (GBI) scheme for grid connected wind power projects with the objective of broadening the investors base by attracting FDI and independent power producers.

During FY11, the country is likely to add close to 2,200 MW of new wind capacity according to officials and around 450 MW is expected to be covered under GBI. The Generation Based Incentive Scheme (GBIS) provides that the energy producer will be entitled to an incentive payout of INR0.50 per unit of electricity fed into the grid. This incentive payout will be over and above the tariff approved by the State Electricity Regulatory Commission (SERC), and will be paid on a semi-annual basis.

The scheme is available for any wind energy producer commissioning wind turbines between 17 December 2009 and 31 March 2012 for a total installed capacity of 4000MW during this period under the scheme.

As Panchabuta had earlier reported, France  has agreed to provide Euro 70 million soft loan to Indian Renewable Energy Development Agency (IREDA) for development of renewable energy in India.

Also as we had earlier mentioned,  Japan Bank for International Cooperation  was planning to provide upto $2 bn equity funding for private sector projects in India including Renewable Energy and had announced plans to create Green Fund for India with other sponsors.

Further as Panchabuta has mentioned Indian Renewable Energy Development Agency (IREDA)  is close to securing Rs 28.5-billion loan from Germany and Japan for mainly Solar focused projects.  IREDA is expected to sign an agreement with Germany’s Kfw Bank in February that will provide it soft loans of Rs. 12 billion. In March, the agency is likely to enter into an arrangement with Japan International Cooperation Agency for soft loans of 16.5 billion.

Most recently, the Government of India a week back signed a loan agreement with the Asian Development Bank (ADB) for $208 million for Tranche 3 of this Investment programme titled ‘Himachal Pradesh Clean Energy Development Investment Program’.

This is apart from a string of investments in the private sector entities by private equity funds including funding of project developers in biomass, wind turbine generator manufacturers, Solar manufacturers and the huge investments expected in the Solar PV developers including the most recent announcement of Kiran Energy yesterday.

10 comments

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