Presentations

Risks for Small Hydro Projects - Bhoruka Power has set up several small hydro projects and shared the risks associated.

Financing for Solar home systems - Shri K.M. Udupa, ex-Syndicate Bank has been one of the pioneers in providing rural financing for solar home systems.

A majority of the population in India still does not have access to energy/electricity. This is primarily because a large segment of this population is situated in rural areas, where the load is very low and geographically dispersed, and the economics do not warrant extension of the grid. Even in rural areas where the grid is present, the availability, reliability and quality of power is extremely poor, given India’s overall energy shortage as well capacity shortage to meet the peak demand. Renewable energy technologies (RET) are economically feasible under such circumstances and can play a significant role in meeting the energy requirements in such areas. Added advantages of RET include promoting a cleaner environment as well as contributing towards climate change mitigation. Given the abundant and unlimited supply of renewable energy sources across the country, they have the potential to contribute not only to improved energy security but energy independence as well.

The key barrier to the deployment of renewable energy technologies in India has been the availability of adequate financing because banks have been extremely conservative and unwilling to fund RE projects due to the unfamiliarity of the new RE technologies. Even in cases where funding exists for such projects, there is lack of adequate information on these sources available to project developers. In addition, the financing community in India is also not aware of approaches or instruments to mitigate risks associated with RE projects that have been adopted in other parts of the world.

Today, India is emerging as a strong player in the Renewable Energy (RE) arena. With close to 9GW of power from renewable energy, the country is well on its way to harness it’s estimated RE potential of 100,000 MW. The annual turnover from RE companies is close to USD 660 million and about USD 3 billion is invested in the sector.

In the past there have been several challenges that have restricted the growth of RE projects. These hurdles are slowly being addressed through governmental support, increase in RE project developers, multilateral financing and a slowly expanding commercial funding. Though financiers are now coming forth to support RE projects, lack of adequate and competitive financing continues to be one of the largest impediments to a faster deployment of RE technologies. Financing is typical extended to corporates and there is no instance of project financing for RE projects. We at IT Power India (ITPI) feel that this is an appropriate time to engage the financing and insurance sector in India to address some of the risks and barriers associated with RE projects in India.

Under the aegis of the GVEP Application Plan (GAP) Fund, IT Power India Pvt. Ltd. had undertaken a capacity building initiative amongst financial institutions and insurers. The project was focused on the potential application of financial risk management instruments for RE projects.