According to reports, India’s Welspun Energy, which will commission the world’s second-largest solar power plant and two other projects by December, will invest an additional $1.6 billion in new projects over three years, its managing director said on Friday.
The 151 MW plant in the central Indian state of Madhya Pradesh is a part of Welspun’s push to capture a slice of the renewable energy market that the government hopes will nearly double in the five years to 2017.
Renewable energy companies are free of some of the stumbling blocks plaguing their peers in India’s thermal power industry, such as coal and gas shortages and fuel transport hassles.
But the sector still faces problems including in acquiring land for projects, a creaky transmission network and state distribution companies that are often too broke to buy power.
Banks should create a separate sector lending cap for renewable energy to avoid it being lumped together with lending to thermal power projects, Vineet Mittal told Reuters at his office in the Indian capital, New Delhi.
Banks have become increasingly unwilling to lend to Indian infrastructure builders saddled with heavy debt and stalled projects.
“The risk-reward here is totally separate than a conventional power plant, so it has to be looked at differently. I think the government is consciously trying to do something, but it’s still not very effective, so availability of the funding is very, very critical,” Mittal said.
Welspun Energy, a part of the textiles-to-steel Welspun Group, aims to have an installed capacity of 1,700 MW of solar and wind power by 2017, an eight-fold increase from its current size.