Arizona-based solar power equipment manufacturer and project developer First Solar wants the Government to consider a sovereign hedge fund focused for the renewable energy sector.

“The Government should consider a sovereign hedge fund to mitigate the impact of currency fluctuations on the repayment of debt/equity by renewable energy developers,” said Sujoy Ghosh, Country Head of First Solar India.

Ghosh added such a fund would allow developers in India to tap foreign capital markets for both debt and equity at a far more competitive rate in the short term.

Speaking to BusinessLine , Ghosh also called for domestic pools of capital from the insurance and pension sector that should have a mandate to invest a part of their corpus in renewable energy assets on a long-term basis.

The Government has an ambitious target of setting up 166 GW of renewable energy capacity by 2022.

In the recently concluded global investor meet, Re-Invest 2015, the Government received commitments for over 266 GW. While the Government is aiming at lowering the per unit cost of solar energy, high capital costs and cost of financing remains a hurdle.

Ghosh said a way to easy costs is to maintain the income-tax holiday on renewable energy projects and continue with the customs duty extension on imported solar modules.

He also called for an end to subsidising the solar energy sector.

“All forms of direct subsidy on solar projects should be removed especially in the distributed generation and energy access market segments to remove market distortions and create capacities on a sustainable basis,” he said.

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