The Indian government is planning a $1 billion private equity fund for the development of its renewable energy sector, according to a series of revealing tweets sent by Piyush Goyal, Indias Power and New and Renewable Energy Minister, on Friday.
Goyal said that the initial fund will be seeded by government-backed companies, but that it will seek to "collect $4 billion/year in 3-4 years" and hopes to secure low-cost overseas debt from foreign companies eager to invest in Indias clean energy transition.
The countrys New and Renewable Energy Secretary Upendra Tripathi had earlier this year confirmed that the Ministry for New and Renewable Energy (MNRE) is intent on securing some $2 billion in funding from the Asian Development Bank and World Bank for financing of its clean energy projects.
A deal was since signed between the World Banks International Finance Corporation (IFC) and IREDA for infrastructure financing for Indias renewable energy projects. The aim, according to Goyal, is to ramp up renewable energy five-fold, with a 2022 generation target of 175,000 MWh of clean energy, with solar power prominent.
The ministers call has already been heeded by IDBI Bank, which this week became Indias first state-backed commercial lender to attract large-scale foreign investment. The bank issued $350 million in green bonds, which are certificates used in India to show that any funds raised will be steered into environmental projects, to global investors, attracting orders of around $1 billion.
India has adopted an increasingly confident stance in the fight against climate change in recent months, with Prime Minister Narendra Modi using day one of the COP21 UN Climate Change Summit in Paris to co-launch the International Solar Alliance alongside France while reiterating his countrys pledge to install 100 GW of solar PV capacity by 2022.
India is after China and the U.S. the third-largest emitter of greenhouse gases in the world, but as the economy grows Modi is eager to adopt greater levels of renewable energy to ensure its emissions do not rise to the levels seen in China and North America. And as solar costs continue to fall, the PM sees PV as the perfect avenue for Indias clean energy transition.