How Green is Your Money? Capitalizing on Indian Renewables

Consistent with India’s ambitious climate-related targets, significant investments are being made in the domestic renewable energy sector, driven largely by private sector activity. Acquisitions and bonds represent a large portion of this capital, along with foreign equity, traditional loans, and mezzanine financing. Enabled by an encouraging FDI regime as well as locally-targeted regulatory schemes – such as incentives introduced by the government to bolster domestic capacity and manufacturing – self-sufficiency and foreign capital now constitute an integrated ecosystem. Along with conventional means of financing, newer frameworks such as infrastructure investment trusts specifically set up in the renewables space could be better explored in the future, especially in light of the urgency with which India needs to catch up towards its climate targets. Legislative changes in respect of the power markets – such as those related to trading in renewable energy certificates (RECs) – may also be curated by appropriate regulatory bodies to expand upon existing revenue streams.


Power Purchase Agreements

The Continued Rise of Renewable Corporate PPAs in India

‘Corporate’ Power Purchase Agreements (PPAs) – as opposed to traditional models of energy procurement by state-owned electricity distribution companies – have proliferated over the past few years. With respect to renewable energy (RE) in particular, India appears to have witnessed one of the largest spikes in the world. Why are so many corporate PPAs getting signed here? Why now, and why specifically with respect to RE? Will this trend continue, and if so, what are the things to look out for? This note seeks to address such questions, including in light of recent (and anticipated) legislative and regulatory developments.


Renewable energy in india

Great Expectations: India’s Tryst with Climate Change

India appears to be on the right track in respect of its accelerated pivot towards renewable energy (RE). However, going by present trends, national capacity-addition with regard to RE is not even close to the annual rate required for achieving its ambitious climate-related targets. Even as the country remains poised to witness a massive increase in electricity demand over the next few decades, in order to remain on a sustainable path, it needs much more funding than what is available in the current policy environment. Further, significant foreign investment is essential to address a developmental change as paradigmatic as achieving carbon-neutrality, especially given the country’s fundamental anxieties related to local industry and energy security. While its climate-related initiatives have mainly been funded through domestic capital so far, India now requires, in addition, both capital and technology from outside. Accordingly, sovereign and international development finance institutions, as well as foreign lenders and investors, need to play a key role towards funding India’s clean energy transition, over and above the government’s own legislative and regulatory interventions.