India, US launch USD 20 mn funding initiative USICEF

India and the US today launched a USD 20-million financing facility 'USICEF' that will help in unlocking OPIC financing and contributing to India's ambitious renewable energy and energy access goals.
OPIC (Overseas Private Investment Corp) is US government's development finance institution. It mobilises private capital to help address critical development challenges and in doing so, advances US foreign policy and national security priorities.
New and Renewable Energy Minister Piyush Goyal and US Ambassador to India Richard Verma launched US-India Clean Energy Finance (USICEF) Initiative, which would help in unlocking OPIC financing and mobilise public and private capital to expand access to distributed clean energy projects, an official statement said.

According to the statement, Letter of Intents were signed and exchanged between MNRE and OPIC for the creation of a USD 20 million for USICEF initiative, equally supported by the US and India would support projects which, upon long-term financing and deployment, and would qualify for the support of long-term debt financing from OPIC.
The US-India Clean Energy Finance facility would support project preparation activities for distributed solar projects in order to unlock OPIC financing and mobilise public and private capital to expand access to distributed clean energy solutions that will benefit disadvantaged communities in India and contribute to India's ambitious renewable energy and energy access goals.

USICEF builds on the success of other project preparation facilities to support renewable energy in emerging markets. Through this initiative, project developers pursuing mini-grid, distributed rooftop and off-grid solar projects, as well as smaller-scale grid connected solar projects would be benefitted, it said.

During the event, Udai Khemka presented Clean Energy Finance Forum (CEFF) Report to Goyal. The report has been prepared after an extensive domestic and international consultation with all categories of financial Institutions (including pension funds, sovereign investors, insurance companies, other financial investors/funds, banks, investment banks etc), multilateral institutions, as well as strategic investors and developers.
CEFF has made recommendations which will help solicit greater investment into the renewable energy sector. Some of the key cross cutting recommendations includes to boost and Accelerate "Open Access" Markets; Improve PPA Bankability; Improve Ease of Access to Domestic Banking and Capital Markets; Encourage International Debt and Equity Investments and Mitigate Currency Risk.

The Minister assured that suggestions emerged out would be examined and corrective actions would be taken up soon.
He also stated in the statement that USICEF would help the early-stage project capital gap for distributed solar by supporting project preparation activities necessary to access long-term debt financing and unlocking OPIC and private finance.