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India’s fast growing solar energy sector is seeing flood of investments from both private and public foreign investors these days. After GE announced a large investment into Welspun Energy’s massive solar farm in Madhya Pradesh, ADB has also announced a $50 million equity infusion into Welspun Energy. KFW is also going to subscribe to Rs 220 crores of compulsorily convertible debentures of the company. Welspun Energy is one of the largest solar energy developers in the country and has already developed large solar farms through both state and central auction schemes. Welspun group is one of the largest industrial groups in the country, which has made a strong foray into renewable energy generation. It has also built up a strong portfolio of wind energy assets in India.
Most of the standalone companies which focus on green energy start with wind energy and then slowly move into solar, however Welspun has followed a different route by focusing on solar energy in the last couple of years. ReNew Power, Greenko and others have also started to look at solar energy as growth options these days, as wind energy growth slows down. Solar energy which clocked 1000 MW of installations last year, could easily see a 20% growth this year as state and federal auctions pick up pace with the advent of a pro-business and investor friendly government in place.
Renewable energy is a capital intensive sector, requiring massive amounts of money which India does not have. Multilateral institutions such as IFC, ADB, KFW etc. have massive amounts of capital at their disposal and promoting green energy is in sync with their mandates as well. These firms such as OPIC have come under fire from green activists for supporting thermal power in developing countries.
More than $200 billion investment was poured globally into renewable energy last year, with almost 40-50% going into solar energy installations. This investment will rise to over $500 billion over the next 15 years and India is going to be a large recipient of this share, given the country’s massive deficit and low per capita consumption.