VATIS UPDATE Article

According to the India’s power minister Mr. Piyush Goyal, more than US$250 billion will be invested in renewable power eneration and transmission in India over the next five years, a figure that could reach $1 trillion by 2030. “By 2022 India plans to have added 225 gigawatts of generating capacity from renewable energy sources, including solar, wind, hydro and biomass. Largely it will be financed through a mix of debt and equity through commercial banks, but we do believe that the developed world has obligations to fulfil,” said Mr. Goyal.

Over the past two years foreign direct investment in India’s electricity sector was $1.32bn, but Mr. Goyal said that the cost of these projects cannot fall entirely on the private sector. He said the public sector must also “play a proactive role to bring down the cost of financing”. The Indian government has approved infrastructure investments trusts (invITs) and is working with the state-owned Power Grid Corporation to divest assets in order to shore up capital for expansion.

InvITs are a type of income trust that is created to finance, construct, own and operate and maintain infrastructure projects.”Once that comes into play, we could look easily at $10bn coming into the infrastructure investment trusts on the transmission side,” said Mr. Goyal. The UAE in 2014 signed a memorandum of understanding to help spread solar and wind power in India. Firms including Masdar, Abu Dhabi, are looking to go in this year.