The Indian Government, under the leadership of Prime Minister Narendra Modi, is gearing up to launch an equity fund targeting renewable energy investments. The fund will reportedly be worth $2 billion with the initial funding of one billion to be available beginning from April 2017.
About the fund
The government is hoping that the Clean Energy Equity Fund (CEEF) will attract both public and private companies and organizations, especially the pension and insurance funds from Canada and Europe. According to reports from different media outlets, $600 million will be contributed from the National Investment and Infrastructure Fund as well from some state-run companies like NTPC Limited.
CEEF is being setup to address the climate impact targets set by the government. The Indian government is hoping to meet their target of 175GW of installed renewable energy which includes a mix of solar and wind energy by 2022.
India’s planned solar energy project suffered a blow earlier this year when the U.S. based company SunEdison filed for bankruptcy. That being said, a wide variety of both multinational and domestic companies like Taiwan’s Foxconn, Japan’s Softbank Corp., and India’s Bharti Enterprises have already pledged to invest about $20 billion in India’s renewable energy sector in the coming years.
The clean energy sector is still very volatile as providing equity to investors is generally tricky due to the inherent uncertainties in expected returns. Still, a global push is currently underway that calls for more research and investment in clean energy technologies and projects like the German Coradia iLint are proof of viability.
Historically, India was the first country in the world to setup a dedicated wing and ministry of non-conventional energy resources in the early 1980s and the recent push by PM Modi to be at the forefront of the battle against global warming and climate change proves that India is ready to take on the challenge.
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Views presented in the article are those of the author and not of ED.