Several companies are investing in India’s goal to becoming a greener economy.
Attracting Investments
ReNew Power is looking to invest $9 billion in wind and solar projects in India through 2025. The company is planning to more than triple its renewable power capacity to 18.5 gigawatts by 2025, and it will look at building its own projects as well as acquisitions for growth.
In another news, private equity firm Actis is planning to invest $850 million to build two energy green platforms in India, sources told Mint. The first platform will focus on establishing grid-connected solar and wind power parks while the second one will cater to the commercial and industrial segment.
In the last month, the United States Agency for International Development (USAID) and the US International Development Finance Corporate announced a $41 million-loan guarantee program to help fund investments by Indian small and medium enterprises (SMEs) in renewable energy solutions.
The infusion of funds in India’s renewable energy sector is not going to stop here. Because Direct General of Solar Power Developers Association Shekhar Dutt told Businessline that India will amass additional investments worth ₹1.75 lakh crore to achieve 35 gigawatt (GW) of renewable power generation capacity next year. This will help the country meet the ambitious target of 175 GW of clean energy capacity by 2022.
Why Are The Investments Pouring In?
Attractive Market
India was ranked as the fourth most attractive renewable energy market in the world in 2019. According to a report by IEA, the country will be the largest contributor to the renewables upswing in 2021, with India’s annual additions almost doubling from 2020. India is also among the top three nations in the world which are leading the global renewable energy growth, according to IREDA.
In the past 4 years, India has attracted $64 billion foreign investment in Indian renewable industry. Also, renewable energy is becoming cheaper in India, with the cost of renewable energy being at ₹16 per unit twenty years ago, and it was ₹2 per unit in late 2020. All this has made India emerge as one of the most attractive investment destinations in the world.
Government Support
India is looking to reduce its dependence on coal and expand renewable power capacity almost five-fold to 450 GW by 2030. According to Prime Minister Narendra Modi, this is a $20 billion a year investment opportunity through the end of the decade. Since the beginning of the COVID-19 crisis in early 2020 to date, India has committed at least $122 billion to support the country’s energy sector.
India has also introduced the Production-Linked Incentive (PLI) Scheme in High Efficiency Solar PV Modules Sector through the Ministry of New and Renewable Energy of with a financial outlay of ₹4500 crore over a five-year period for enhancing India’s manufacturing capabilities and enhancing exports — Atmanirbhar Bharat.
Looking Ahead
While speaking at the United National Climate Ambition Summit in mid-December, PM Modi said that India is not only on track to achieve the Paris Agreement’s targets but to exceed them beyond expectations. Also, by 2030, the Indian government wants to meet half of India’s power demand with renewable energy resources.
So, India is an attractive market and the government is keen to make India a clean energy economy. We have to wait and see whether we are able to achieve our goals by the proposed time or will the second pandemic wave affect the government’s plans.
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