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Extra support to power big growth in clean energy in India

According to reports, The Union budget 2013-14 proves to be overall positive for renewableenergy sector. While the wind power sector is happily looking forward to next growth trajectory, solar segment is little disappointed for not hearing anything to boost domestic manufacturing. But, other support measures, such as low interest loans and extension of tax exemption are to give a fillip to the entire clean energy sector.

Wind power sector saw fall in investments and capacity addition last year, after the lapse of accelerated depreciation (AD) and GBI (generation-based incentive) schemes. During 2012, India slipped to fourth position in wind power capacity addition globally from third position in 2011. Also, during the first 10 months of this fiscal, wind sector has added just 1,200 mw new capacity against the target of 2,500 mw for FY13.

So, the finance minister’s announcement comes as a breather. “The re-introduction of GBI will rejuvenate and boost the wind energy sector with more investments. I am confident that the industry would bounce back by 2014-15 and may be able to cross the set target of 5,000 mw capacity every year,” Ramesh Kymal, chairman, Indian Wind Turbine Manufacturers’ Association (IWTMA). “The extension of tax exemption of the clause 80-IA by one more year is a happy move, as now the green energy power projects can avail a tax holiday for a period of 10 years out of the total 15 year period,” said Kyamal.

U B Reddy, secretary Wind IPP association, said: “With no clarity on GBI and AD, financial closures of lot of projects were pending. Now, those things would be done during next fiscal and will drive rapid capacity addition with more investments from IPPs (independent power producers).”

Sanjay Chakrabarti, partner and national leader – Cleantech, Ernst & Young India, said: “The unambiguous provisioning of Rs 800 crore as GBIs for the wind industry is likely to further spur cleantech investments in India. The provisioning of concessional loans from IREDA through national clean energy fund (NCEF) and grants for waste-to-energy projects to municipalities is likely to further up the investor sentiment.”

Pashupathy Gopalan, managing director of Sun Edison India, said overall the budget measures were positive for renewable energy sector. But he felt FM could have spelt out some duty exemptions for import of components to boost domestic solar manufacturing.

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