The government expects to mobilise $1.1 billion of finance from multilateral institutions such as ADB, World Bank and IFC, and private developers, to fund projects that will support renewable energy adoption in India. In addition, $70 million is expected to come from various climate investment funds (CIF), which will be blended with the concessional loans from the multilateral institutions to finance these projects.
In its recently released ‘Renewable Energy Integration Investment Plan (REI-IP)’, the Ministry of New and Renewable Energy speaks of three areas in which projects will be supported with these funds. The first is ‘energy storage systems deployment’, focused on renewable energy-enabling technologies to bolster grid flexibility and ensure a smoother integration of renewable sources.
The second area is enhancement of grid infrastructure to improve both inter and intra-state transmission capabilities, specifically for renewable energy, to improve grid reliability and resilience. This aspect could also include upgrading port infrastructure to support offshore wind projects, the document says.
The third area is for offering technical assistance “to foster innovation in renewable energy technologies and the development of robust power markets.”
Multiple projects
MNRE mentions several projects under REI-IP. One is a $425 million ‘power system strengthening’ project with $200 million concessional loan from ADB. The second is a project, also with an investment of $425 million for strengthening grid and creating port facilities for evacuation of power from 10 GW of offshore wind capacity, for which the World Bank will chip in with a $200 million concessional loan. The third is a $220 million project for the deployment of 200 MW of renewable energy integrated with battery energy storage, exclusively to provide round-the-clock energy to commercial and industrial (C&I) customers. For this project, IFC, Washington will provide funding of $100 million.
The REI-IP document also speaks of providing technical assistance, in terms of advanced forecasting tools, capacity building and “innovative methods for uptake of renewable energy”, such as by the use of contracts for difference, virtual PPA and peer-to-peer trading. No financial outlay for these activities has been mentioned.
“The estimated total resource requirement to finance India’s REI Investment Plan is $1135 million. CIF concessional financing is expected to catalyse more than 10 times in overall investment from MDBs, development partners, and contributions from national and local governments and SOEs. It is anticipated that the CIF will finance a total of $70 million, which includes a grant of $4 million for technical assistance, while the remaining $1100 million will be funded by the ADB, World Bank and the IFC, including funding mobilised through development partners and the private sector,” says the MNRE document.