In one of the biggest deals for the growing renewable energy sector in India, US federal agencies have committed a total $4 billion for both projects and equipment sourcing.
The officials who were close to the developments that happened at the ‘US-India Business Summit’ said three US federal agencies have made separate commitments to pump money in the Indian clean energy sector.
US TRADE and Development Agency (USTDA) has decided to leverage $2 billion loan to renewable energy projects. In another association, US Overseas Private INVESTMENT Corporation (USOPIC) will lend $1 billion to clean energy projects in India.
The deal which saw its inception during PM Narendra Modi’s visit to the US last year, US Exim bank will culminate $1 billion lending in a month’s time, said the officials privy to the matter.
Aiming to finance the renewable power project developers in India sourcing components from US, IREDA (Indian Renewable Energy Development Agency) and US EXIM bank signed an agreement to finance such projects over a period of 18 years in September 2014. The US Exim Bank would finalise the deal in next month, after a visit by its officials.
“The US President emphasised that all their agencies would work together for more investment in renewable energy and bilateral ties,” said an Indian government official in the know.
Modi led Indian government has recently revised targets for solar and wind capacity addition. While solar power capacity addition has been revised to 1 lakh Mw by 2019, wind power generation target is 10,000 Mw annually. The government would also push domestic manufacturing in renewable energy under its flagship ‘Make in India’ program.
While wind turbines in the country are mostly domestically sourced, 70% of the country’s solar capacity is based on imported content, mostly from China and the US. While the country aims to add around 4,500 Mw of solar power capacity during the current fiscal to the current 2,600 Mw, the manufacturing capacity in the country is just 1,500 Mw.