According to reports, the National Clean Energy Fund (NCEF), set up in 2011 by taxing coal production, will soon provide low cost loans to investors in renewable energy, said Alok Srivastava, joint secretary, Ministry of New and Renewable Energy on Wednesday.
Currently, the installed capacity for renewable energy in the country is around 25,000 MW and high rates of interest for loans are seen by investors as an obstruction to the development of renewable energy sources. Loans are currently given at 12 per cent interest and investors want this percentage reduced to around 8 per cent.
“NCEF funds will come to us (MNRE Ministry) as grants. We will use these funds to provide loans at reduced rates of interest. Fifty per cent of the project funding can be obtained from these funds and the rest from banks. This will reduce the overall rate of interest,” Srivastava said on the sidelines of Indo-US joint regional workshop on renewal energy. He said that a declaration of 1 billion Euros in soft credit from the German government-owned development bank, Kreditanstalt fur Wiederaufbau will be signed between MNRE and German government on Thursday.
“These funds will be used for the development of a transmission and evacuation corridor termed the Green Energy Corridor for renewable energy in the country,” he added. The funds will be utilised on the basis of a report prepared by the Power Grid Corporation of India on setting up of a Green Energy Corridor which involves eight states, including Karnataka, Tamil Nadu, Andra Pradesh, Himachal Pradesh, Rajasthan and others.
On generation based incentives for wind energy producers, Srivastava said the ministry was positive and the matter would be soon placed before the Cabinet.
The GBI scheme, before it was stopped in March last year, provided wind power generators an incentive of 50 paise per unit subject to a cap of Rs 62.5 lakh per MW. The scheme, this year, promises to be better, sources said.