The Asian Development Bank expects to step up its funding for the renewable energy sector, both sovereign and directly to the private sector. It is in discussions to channelise a credit line for energy efficiency.
Pradeep Perera, Energy Head India, South Asia Department, Asian Development Bank, told BusinessLine that, “We are quite active in the country's renewable energy space compared to energy efficiency and there is hectic activity in the infrastructure space. We are now looking at energy efficiency sector.”
“Thus far, we have funded only the RE sector, but we are looking at funding energy efficiency. Our engagement with EESL has been restricted to LED lighting with a funding of $200 million. ADB is engaged with CII, and exploring opportunities in the energy efficiency, which could be presented through the Bureau of Energy Efficiency to the Ministry of Finance. The whole process could take about six to 12 months,” he said.
“Our lending in India is about $2-2.5 billion per annum, which is sovereign lending, in addition to about $700-800 million to the private sector. We expect the overall lending to go up to about $4 billion in the coming year,” Perera said.
In terms of overall lending, the amount could be bigger but for the limitations that the Fiscal Responsibility and Budget Management Act, which sets a cap on borrowings.
The renewable energy is growing at a rapid pace in the last 5-10 years. It is disruptive to the traditional thermal power plants. Already a lot of RE projects have achieved grid parity. “If the capacity of renewable goes up rapidly, the existing thermal plants will face operational issues as their costs could go up,” he explained.
The multilateral lending agency says there needs to be a balanced development as the rapid growth of renewable energy without providing for support infrastructure will impact the existing power projects.
“Our funding in the renewable sector spans electricity evacuation, transmission networks and Green Energy Corridors. We are working with the PowerGrid in Rajasthan, Gujarat and South and recently teamed up with Punjab National Bank for rooftop solar. A lot of funding has been channelised by ADB in the transmission sector,” he said.
“In addition, there have been several arrangements like IREDA credit line. Bankability is a matter of concern as the financial health of several Discoms has been an issue. We are working with UP, MP, North Eastern States to address these issues,” he added.
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