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Tata Cleantech Capital may finance up to INR 25 billion of clean energy projects in India

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(Credit: Tata Cleantech Capital Ltd) Image shows a screenshot capture of the website of Tata Cleantech Capital Ltd.Tata Cleantech Capital Ltd
December 3
5:57 AM 2013

Tata Cleantech Capital Ltd, the joint venture company formed by Tata Capital Ltd and International Finance Corp, told Bloomberg that it may fund up to INR 25 billion or USD 401 million of renewable and energy-efficient projects in India. In an interview, Chief Executive Officer Avijit Bhattacharya said the higher cost for coal-based power have urged companies to consider alternative energy. He said, "The combined cost of grid power and diesel generators that many companies use today is higher than solar."

Bhattacharya added that the situation has brought about an opportunity to finance clean technology projects that will help companies bring down their power costs without the use of subsidies. He said that the cost of producing solar power is 8 rupees per kilowatt-hour. This is lower compared to the 11 rupees paid for electricity by commercial buildings located outside of Mumbai.

The report said India's renewable capacity of 29 gigawatts was set up mostly through tax breaks and the aid of government subsidies. However, declining costs in renewable and increasing prices of fossil fuel in the past year have paved the way for wind and solar energies to become competitive in the power market absent government support.

While initial investments for solar installations and other energy efficient projects are large, they do generate savings as time passes by, the report said. Tata Cleantech, meanwhile, intends to finance energy services firms which will help customers get those rewards but without the large capital investment.

Bhattacharya said, "Many companies are interested in the benefits, but they're not keen to invest upfront. It's the emergence of energy-services companies that will drive this sector in India. It won't happen without them." He said those firms could pour money in a solar installation, manage it and then sell the output at a competitive price through  a long-term agreement to a consumer. He said he is already in advanced discussions with two energy service companies for possible funding but did not name the firms.

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