National Clean Energy Fund was set up to serve as a separate non-lapsable corpus for funding green energy projects with the broader objective of cutting down India’s carbon footprint. Collections for the fund are made from the clean energy cess of Rs 50 per tonne on coal, lignite and peat.
Earlier this year there was a proposal to allocate a sum of Rs. 200 crore from the National Clean Energy Fund as Centre’s contribution in 2011-12 for launching environmental pollution remediation programmes in the union budget.
The Prime Minister, Dr. Manmohan Singh, has earlier said that, India has been trying to establish the principle that the polluter must pay though that is much more difficult to achieve in all cases and that last year, for example, the cess of 5% on the use of coal- both domestic or imported- was used to build the corpus of a National Clean Energy Fund.
Earlier, Pramod Deo, chairman of the Central Electricity Regulatory Commission, has told Bloomberg that the finance ministry is considering a plan to give the money to states that don’t have the infrastructure to move the power from planned renewable-energy plants. “It would provide viability funding to those states” to extend their transmission networks to solar plants, wind farms and other clean-energy projects being built, Deohad further said.
“This is a real need the central government must look into,” Deepak Gupta, secretary at the Ministry of New and Renewable Energy, told a conference in Delhi last week. “This money should probably come from the clean energy fund.”
Panchabuta had mentioned a couple of days back that the union government was likely to discuss the use of Rs. 31.24 billion National Clean Energy Fund.
According to reports, the CCEA has approved constitution of an ‘National Clean Energy Fund’ (NCEF) in the public account of India along with the guidelines as well as modalities for approval of projects to be funded from the Fund.
The Finance Bill 2010-11 provided for creation of a corpus called National Clean Energy Fund to invest in entrepreneurial ventures and research in the field of clean energy technologies. Subsequent to the budget announcement, the Central Board of Excise & Customs (CBEC) issued a notification dated June 22, 2010 to notify the Clean Energy Cess Rules, 2010.
An Inter Ministerial Group (IMG) has been constituted to approve the projects/schemes eligible for financing under the National Clean Energy Fund, consisting of following members:
- Finance Secretary-Chairperson
- Secretary (Expenditure)-Member
- Secretary (Revenue)-Member
- Representatives from Ministries of Power, Coal, Chemicals & Fertilizers, Petroleum & Natural Gas, New & Renewable Energy and Environment & Forests.
The National Clean Energy Fund will be used for funding research and innovative projects in clean energy technologies. Any project/scheme for innovative methods to adopt to clean energy technology and research & development shall be eligible for funding under the NCEF. Such projects may be:
(a) Sponsored by a Ministry/Department of the Government; and
(b) Submitted by individual/ consortium of organizations in the government/public sector/private sector in the form of loan or viability gap funding, as the IMG deems fit on case to case basis. Government assistance under the NCEF shall in no case exceed 40% of the total project cost.
A standard format for submission and evaluation of projects shall be designed by the IMG to receive proposals from various ministries of Government of India.
Proposals for loan or viability gap funding by Individuals/ consortiums are to be submitted to the concerned Ministry first, which, after due consideration, shall place them before the IMG. The IMG may seek the views of technical experts from related organizations and individuals of repute in the area of clean energy to review, evaluate and recommend projects.
There will be a time frame specified under the scheme for processing of applications at each stage. The IMG will identify/appoint appropriate professional agencies to monitor progress of NCEF funded projects.