SHIMLA: World Bank on Sunday signed an agreement with Himachal Pradesh government for what is to be the world’s largest and India’s first clean development mechanism (CDM) project. Under this, the bank will buy carbon credits from the new forests being developed on degraded lands under a watershed management programme. In presence of chief minister Prem Kumar Dhumal, the agreement was signed by Hurber Nove Josserand, deputy country director, World Bank, on behalf of International Bank for Reconstruction & Development: World Bank Bio Carbon Fund, and Sudripto Roy, additional chief secretary forests on behalf of the state government. The agreement would be in force till December 2018. Speaking after signing of the agreement, Josserand said the project would impact an area of 4,003.07 hectares. The figure for the area surpasses the 3,500 hectares for CDM project of China, to make it the largest project of its kind in the world.
NEW DELHI — India has made it into the A-list of global investors in renewable energy, a recognition of the country’s proactive government energy program, natural resources and mushrooming swathe of entrepreneurs.
India ranked as the third favored destination with 35% of the respondents saying they would invest in India, behind the U.S., which was targeted by 53% of the respondents, and China (38%), according to a report, called Green Power 2011: The KPMG Reneweable Energy M&A Report,” released Wednesday by KPMG that is based on a survey of 500 executives active in the renewable energy arena globally.
Adeel Halim/Bloomberg NewsDismantled windmills lie on the ground at a wind farm in Kammalapatti in India, April 11.
For instance, India’s wind-energy companies, which are in the midst of a hectic pace of development, have attracted more than $586 million of project financing this quarter. This already is 63% of the $934 million raised in all of 2010.
“The Indian market has become increasingly dynamic in recent years as a result of strong natural resources, greater accommodation to international investment compared with China and a variety of government incentives,” the report said.
While Indian banks continue to be the main source of funding, international lenders are taking note. HSBC and Sumitomo Mitsui Banking Corp. provided $110 million debt project financing in March for a wind farm in the western state of Gujarat.
The pace of growth and investments in India is part of a worldwide trend. Deal activity among renewable energy companies globally surged 70% in 2010, and continues to maintain this hectic clip in the first quarter, according to the report.
In the first quarter, 141 transactions worth $11.2 billion were signed, while last year, an average of 96 deals worth $5.5 billion were announced in each quarter.
“All in all, 2011 looks set to be another buoyant year,” the report said, but added a caveat that the first quarter data doesn’t reflect the impact of the tsunami in Japan in March.
The survey data also revealed that investors preferred to invest locally rather than across borders. But nearly 60% of Asia-Pacific acquirers said they are targeting India or China. India also features as one of the top three destinations for solar energy companies along with the U.S. and Italy.
“With India it is a combination of factors,” said Siobhan Smyth, head of renewables at HSBC, who was interviewed as part of the survey.
“There is a portfolio standard on a state-by-state basis. Developers have the ability to get [public-private agreementss due to utility obligations. Then there are the generation-based incentive and tax-depreciation incentives. You are looking at 15% to 20% returns depending on the state you look at and the type of assets you are buying.”
Coca Cola India has come up this summer with a new innovation as to increase its sales and presence in rural areas. The company has launched an eco friendly ‘eKOCool’, a chest cooler, developed internally by the Indian arm of the Atlanta based multinational, operates exclusively through solar energy, with no other electricity source required to operate it.
It has a capacity to store two crates, which contains 48 glass bottles of 300ml each. It can even charge mobile phone and light up homes. This innovation will provide the company with first mover advantage to ramp up its sale and solve the problem faced by major shopkeepers in rural as to sell chilled soft drinks in hot summers as there is no electricity facility available.
The product loaded into the cooler early morning or previous night is ready to be served chilled in the morning. The cooling equipment brings benefits to the retailer too in terms of saving on the electricity bill and cost of ice.
A pilot project under which 20 such coolers were placed in rural areas near Agra (UP) has been successfully completed this summer. Sales from these outlets have jumped nearly five times, a company official said.
Fulfilling an important step of the Partnership to Advance Clean Energy announced by President Obama and Prime Minister Singh
last November, India and the U.S. have announced funding commitments of 25 million dollars each to support the U.S.-India Joint Clean Energyesearch and Development Center (JCERDC).
According to U.S. Ambassador to India Timothy J. Roemer, “This is the first collaborative research effort of its kind, where Indian and U.S. researchers will be jointly selected. It elevates the U.S.-India clean energy cooperation to a new level and is a testament to the strength of our continued strategic partnership. We look forward to closer cooperation on clean energy between the technical experts of our two knowledge societies, and sharing the benefits of the collaborative research.”
The United States and India will provide awards in three priority areas: biofuels, building energy efficiency, and solar energy. These awards will support joint consortia of U.S. and India private sector companies, non-governmental organizations, research labs, or other organizations. Selected consortia will leverage government resources by contributing matching funding, totaling an additional 50 million dollars.
The JCERDC will be located in existing facilities in both countries.
Applications are due by August 16, 2011, with selections expected later this fall.