You are here: Home » Economy & Policy » News
Business Standard

Modi visit to give Indian green energy $1-bn push

Shreya Jai  |  New Delhi 

The clean energy sector in India will be one of the first sectors that would benefit during Prime Minister Narendra Modi's US trip. The sector awaits investments worth about $1 billion from US companies.

To finance sourcing of components from the US for Indian renewable power project developers, IREDA (Indian Renewable Energy Development Agency) and the US Exim Bank would sign an agreement. The financing would span over 18 years. (DATE WITH US INC)

Officials close to the development said the agreement would be signed during Modi's visit to the US. "This amount would be extended as tied loans on a project-to-project basis. There would be a fine balance for all kinds of renewable-based power projects. Though the major import from the US is solar panels, loans are likely to give much-needed push to solar power project development," said a senior official. (BUSINESS BREAKFAST)

  • $1 billion agreement between US Exim Bank and IREDA
  • IREDA develops and extends financial assistance for renewable energy projects
  • Aid to buy equipment for renewable projects from the US
  • Projects need to have 30% locally sourced equipment
  • Major impetus to solar power which imports largely from the US

The rider, however, is that 30 per cent of the total equipment in the power project should be domestically sourced. Confirming the development, K S Popli, chairman and managing director, IREDA, said, "The loan amount of up to $1 billion is extended by the US Exim bank to IREDA for disbursal to grid-connected projects. Though there is no sovereign guarantee that comes with the loan but it would be extended to anyone who wants to set up a renewable energy-based power project with equipment sourcing from the US."

The country aims to add about 4,500 Mw of solar power capacity during the current financial year to the existing capacity of 2,600 Mw. The manufacturing capacity of solar panels in the country, however, is just 1,500 Mw. To invite global players to the country, the ministry of new and renewable energy would also host the first-ever renewable energy global investment promotion meet in February next year. This goes well with the mega 'Make in India' plan of the government to boost manufacturing in the country.

While wind turbines in the country are mostly domestically sourced, 70 per cent of its solar capacity is based on imported content, mostly from China and the US. The government recently quashed the imposition of dumping duty on imported solar cells and modules from the US, China, Malaysia and Taiwan.

Domestic solar cells and module makers had contested in 2012 that cheap imports are killing the indigenous industry.

Dear Reader,

Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.
We, however, have a request.

As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital Editor

First Published: Tue, September 30 2014. 00:50 IST