The need for energy efficiency is presently a global hot topic, and so the inaugural National Energy Investment Summit being held next month, is both a timely and significant platform for the region.
The event is taking place on July 21st – 22nd 2011 at The Grand in New Delhi, and is seen as pivotal in the country’s quest to achieve its 2022 agenda.
It is supported by a number of Government and industry associations, including the Ministry of New and Renewable Energy, The Energy Resource Institute, World Institute of Sustainable Energy, Indian Wind Energy Association, Solar Energy Society of India, Indian Private Equity & Venture Capital Association, All India Association of Industries and Centre for Wind Energy Technology (C WET), Renewable Energy & Energy Efficiency Partnership and Independent Power Producers Association of India.
Up to 150 investors, Government officials and renewable energy solution providers are attending. Investors are expected to travel from the Middle East, Europe, China and Australia – as well as India.
This initiative provides an ideal arena for all parties to discuss projects geared towards transforming the country’s energy industry. Key issues such as emission reduction, carbon emission trading and Clean Development Mechanism are also being debated.
The two days are organised and hosted by business information group naseba. “We are proud to host this summit and grateful for the support of the Ministry of New and Renewable Energy in India. This is the first capital raising platform for renewable energy projects of its kind in the region, and up to US$ 7.5 billion in expected to be invested.” commented naseba General Manager (INDIA) , Mohammed Saleem
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.”
The US’s strong solar adoption has it in second place, behind only China, according to the report, China remains on top due to offshore wind, and an aggressive five year RFP that specs 11.3% of energy from renewable sources by 2015. In solar indices, the US takes top honors, followed by India then China.
Many top-20 countries suffered from declining incentives and capital. Japan’s nuclear crisis threw the country’s energy environment into turmoil, and it dropped three places in the rankings.
Solar grew 40% since May 2010, thanks to cost and production drops. It proved more stable than wind this quarter. Gil Forer, global cleantech leader at Ernst & Young, points out:”It is important to overcome the misconception that renewable energy is too expensive, as we continue to see reduction in cost due to improvements in production and supply chain efficiencies as well as in technology.”