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Rabo
India Finance gives more thrust to renewable energy sector
Nisha
Das
31 August 2003
Mumbai:
Deviating
from the traditional power project financing concept,
non-banking finance company Rabo India Finance has decided
to give more thrust to the renewable energy sector.
Rabo
has tied up with the BTS group, a Switzerland-based private
equity fund, to set up a $30-million private equity fund
dedicated to renewable energy projects in the country.
 The
NBFC has also completed project financing and advisory
works for three small-sized hydel power projects in Karnataka
and Himachal Pradesh. The total project cost of these
projects is around Rs 500 crore.
Says
Rabo India director (project advisory and infrastructure
management) Somak Ghosh: "In the area of sustainable
banking and renewable energy initiatives we can add value
with our world-wide expertise. The company is in the process
of scouting for both domestic and overseas investors for
its renewable energy fund named as Indian Renewable Energy
Equity Fund. Rabo India Finance will be the 'country advisor'
for the private equity fund."
BTS
is a Zurich-headquartered financial advisor and investment
company specialised in facilitating business and investment
in the Indian subcontinent The fund is expected to be
ready by December 2003.
Ghosh
says Rabo recently completed the project financing and
advisory works of three hydel projects. The first project,
the 24-mega watt Hemavati project in Karnataka, promoted
by US-based Bio Development Inc, has already commenced
operations.
The
debt part of the project has been funded by Rabo, ICICI
and IDFC. The other two projects, the 86-mw Malana project
and 8-mw EDCL project, have already started commercial
operations in Himachal Pradesh. The total project cost
of these three project is estimated at Rs 500 crore. Rabo
has a debt exposure of Rs 85 crore in these projects.
A
substantial part of power from these projects is directly
consumed by Power Trading Corporation and the remaining
by the respective state electricity boards. The special
status provided to the renewal energy projects allowed
the firms to sell power directly to third parities, says
Ghosh.
 According
to him, the small hydropower project is a highly capital
intensive technology; consequently, the cost of power
produced is highly sensitive to the interest rate charged
on that capital. The cost of producing power from small
hydropower projects will reduce considerably if they are
financed at the same rate as conventional energy projects.
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