In one of the biggest deals for the growing renewable energy (RE) sector in India, US federal agencies have committed a total of $4 billion for both projects and equipment sourcing.
Officials close to the developments at the 'US-India Business Summit' said three US government agencies made separate commitments to pump money in the sector.
US Trade and Development Agency has decided to leverage a $2-bn loan to RE projects. The US Overseas Private Investment Corporation will lend $1 bn to clean energy projects in India.
And, in a deal which saw its inception during Prime Minister Narendra Modi's visit to the US last year, the US Exim Bank will agree to $1 bn lending in a month's time, said the officials. Aiming to finance RE project developers in India sourcing components from the US, the 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 Exim Bank would finalise the deal next month, after a visit by its officials.
"The US President emphasised that all their agencies would work together for more investment in RE and bilateral ties," said an Indian government official.
The government here had recently revised the targets for solar and wind energy capacity addition. The former was revised to 100,000 Mw by 2019 and the latter to 10,000 Mw annually. The government would also push domestic manufacturing in RE under its 'Make in India' programme. Wind energy turbines in the country are mostly domestically sourced but 70 per cent of the country's solar energy 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 financial year to the current 2,600 Mw, the manufacturing capacity in the country is only 1,500 Mw.