Investment offers pour in for green power projects

17 Feb 2015


Prime Minister Narendra Modi's thrust on renewable energy got a big push with the Subhash Chandra-backed Essel Group proposing to generate 12,000 MW of renewable energy with planned investment of over Rs75,000 crore over the next five years.

The Hinduja Group also on Monday said it is looking to invest up to $1 billion to set up solar-based power projects in the country to generate 1,000 MW.

''We have identified locations in three states, including Rajasthan and Gujarat,'' Gopichand P Hinduja, co-chairman of the $25-billion group said on the sidelines of the RE-INVEST 2015 conference in New Delhi.

The company has acquired land and is in talks with three potential partners, of which one will be selected after due diligence.

Shom Hinduja, the 23-year-old son of group chairman Ashok Hinduja, is heading the solar power business.

Mahindra Group, Adani and Reliance are also are planning to expand in the renewable energy sector in a big way while traditional renewable energy players such as Suzlon and Green Infra are gearing up for a big play by getting fresh investments.

While Green Infra has divested 60 per cent stake to a Singapore-based private equity investor for Rs1,051 crore, Sun Pharma's Dilip Shanghvi bought 23 per cent of Suzlon for Rs1,800 crore.

Separately, YES Bank announced that it is issuing India's first Green Infrastructure Bonds to raise Rs500 crore while the State Bank of India has committed Rs75,000 crore to fund renewable energy projects.

However, considering India's renewable energy potential and the target of 175 GW of additional capacity installation by 2022, it is estimated that the renewable energy sector will require significant financing.

According to market analysts, the 170 GW target for renewable power is achievable with government support. ''The technology curve for solar power is evolving. In the past two years, capital cost per MW has fallen from Rs14 crore to less than Rs8 crore. Consequently, average solar tariff rates have declined from Rs15 per kWh to Rs8 per kWh.

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