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Reserve Bank of India (RBI) should create a “separate window to finance” solar and other renewable energy projects

According to reports, stating that a huge amount of money and funding was required from banks and financial institutions to achieve the right kind of energy mix to meet the ever growing energy needs of the country, Tata-BP Solar CEO K. Subramanya said the Reserve Bank of India (RBI) should create a “separate window to finance” solar and other renewable energy projects in view of the limitations of banks to go beyond the sectoral spending limit.

In an interaction with this correspondent here, Mr. Subramanya said with power sector requiring huge amounts of money, it was time to look beyond the business as usual approach. He said the RBI should come out with a policy where funding solar and other renewable energy projects should be through a separate window and given priority status. “We need funding on long-term basis. We need banks to issue long-term bonds to raise finances and create a pool so that such projects are financed at a low cost. Banks have sectoral limits on funding and renewable energy should be treated as a separate sector for financing,” he said.

Mr. Subramanya said the renewable energy capacity of 16,786 MW is less than 10 per cent of the 167,077 MW installed power that exists in the country. It is only 10 per cent of the installed capacity but in actual generation terms, renewable energy sources constitute 7.7 per cent of the power generation. He said among the renewable energy sources, wind energy had been the most successful so far and accounted for majority of the share.

He said the short-term situation was not something to cheer about due to job crisis in the U.S., sovereign debt crisis in the eurozone and the continued weakening of the rupee against the dollar. However, in the long-term there was great opportunity as there was enough for everybody. “We have lot to do and achieve. We still have large places in the country were electricity has not even reached. Surely there are challenges and they need to be faced to pave way for growth in this sector. We need to produce lots of energy. Right and appropriate mix of power growth is required in the XII Plan to achieve the energy equity. A lot of public and private investment is needed for this to be achieved,” he added.

The Tata-BP Solar CEO felt that India needed the right kind of energy mix and a proper policy framework to achieve the desired results. “We have to create an integral, integrated and holistic policy plan which leads to policy excitement so that more R&D and innovation takes place. This in turn will create jobs, costs will come down and more investments will follow. A large number of countries like Germany, China and Italy have done it and why not India?

Stating that Tata-BP Solar was optimistic about the future of solar energy in India, Mr. Subramanya said that by the end of this year or by early next year, several hundreds of megawatts of solar energy would flow into the grid. “My own company is undertaking a large number of projects in Andhra Pradesh, Tamil Nadu, Orissa, Chhattisgarh, Jharkhand, Uttarakhand and Madhya Pradesh and Ladakh in Jammu and Kashmir,” he said.

Stating that they were upbeat about business in India, he said Tata BP Solar as of now had an existing cell manufacturing capacity of 84 MW and module manufacturing capacity of 125 MW. These would be increased in the coming years in tune with the expansion and development of the Indian and solar market.

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