Govt has raised Rs.16,000cr for Sovereign Green Bonds, says Minister
The draft National Electricity Plan (31 May 2023) prepared by Central Electricity Authority (CEA) has estimated Rs.20.67 lakh crore fund requirement for solar and wind generation projects during FY 2022–2032.
The Solar & Wind power projects are developed by Independent Power Producers (IPPs), said the Minister for New & Renewable Energy and Power R. K. Singh in Lok Sabha on 7 Dec 2023.
To ensure availability of low-cost funds for Renewable Energy Projects, the Government has raised Sovereign Green Bonds of Rs.16,000 crore (approximately) during FY 22-23. Out of the proceeds of Sovereign Green Bonds, Rs.6,186 crores were dedicated for renewable energy.
IREDA had raised Green Masala Bonds of US$300 million in Oct 2017 for financing green energy projects in India. These bonds had a tenor of 5 years and were listed on the International Securities Market segment of the London Stock Exchange, Singapore Stock Exchange and also NSE IFSC. These bonds matured in October 2022.
Meanwhile, most of the Renewable Energy projects in the country are being set up by private sector developers selected through a transparent bidding process. Private sector developers identify locations for setting up the renewable energy projects and also arrange financing of these projects, he said.
The sources available for Equity Funding include Private Equity Capital, Own Funds of the developers, Venture Capital, etc.
The sources available for debt financing include commercial banks, FIs like IREDA, PFC, REC, external commercial borrowings and foreign currency loans from multilateral and bilateral agencies like World Bank, ADB, KfW, Exim Bank, AfD, etc.
In order to encourage investment in renewable energy sector, some of the steps taken by Government are as under:
Permitting Foreign Direct Investment (FDI) up to 100% under the automatic route.
Waiver of Inter State Transmission System (ISTS) charges for inter-state sale of solar and wind power for projects to be commissioned by 30 June 2025.
Declared plan to add 50 GW of renewable energy capacity annually for next 5 years
Declaration of trajectory for Renewable Purchase Obligation (RPO) up to the year 2029-30
Standardization Bidding Guidelines for tariff based competitive bidding process.
Implementation of Production Linked Incentive (PLI) scheme for solar PV manufacturers
Reducing PPA counterparty risk by sourcing energy purchases through highly rated Central Public Sector Enterprises;
Increasing overall health of the sector through various schemes as Liquidity Infusion Scheme to help Distribution Companies settle their debt and Electricity (Late Payment Surcharge & related matters) Rules, 2022 to encourage timely payment of dues, apart from the Revamped Distribution Sector Scheme;
Facilitating support through its dedicated agencies such as National Institute of Wind Energy (NIWE) and National Institute of Solar Energy.
Financial Institutions have Hedging Policy in place to mitigate the foreign currency risks and have hedged foreign currency loans for both currency and interest rate risk. Fiinews.com
