Foreign funds in India will boost Renewable energy

Foreign companies and funds have been making a beeline to invest in India’s’ burgeoning solar energy sector. With the government setting up an ambitious target of expanding capacity by 25x in the next 5 years, major organizations such as Trina Solar, Softbank etc. have already set up Indian offices to bid in the large solar tenders being issued rapidly by the government. With plans of increasing capacity from 1 GW in 2014 to 10 GW and more by 2017, there is a massive scope for renewable energy developers in India. PM Modi’s recent visit to UK to invite FDI into India, has already evinced interest from UK power and IPPs to invest in India’s solar power sector. OPG Power Ventures and Lightsource Renewable have committed to invest billions of pounds into India’s solar sector.

PM Modi’s frequent visits to foreign countries have been criticized by the opposition for producing no results, except for photo-op opportunities and selfies. However I think the results are showing, with major MNCs such as Foxconn getting the confidence to invest in multi-billion dollar projects. They are being short sighted in thinking that these projects can be implemented in a month. Foreign investors are slowly gaining the lost confidence in India’s growth story, which was badly damaged by the previous government’s criminal apathy and corruption.

Modi has been extremely hard working in making numerous visits to most major powers in the last 18 months. He has strongly wooed foreign companies to set up factors under the “Make in India”. campaign. The regulations and policies are being simplified in the power sector. Major reforms are being undertaken to solve the discom debt issues, as well as allow interstate sharing of power. Funds are being poured into solar power projects, with the ultimate aim of making them self-sufficient in the near future. Not only UK firms, but companies from Russia, USA, Japan and China have already committed to invest billions into India’s renewable energy sector, which has become highly competitive. Tariffs have become competitive with coal power with the recent NTPC tender seeing a price point of just Rs 4.63/kWh. This is expected to keep going down in the future, as interest rates and equipment costs decline.