India lands $1.36 billion of US Govt cleantech finance

As a high-level diplomatic talks took place between India's minister of external affairs, SM Krishna, and US secretary of state, Hillary Clinton, a number of announcements at peripheral meetings saw the dollar total of clean energy investments, loans and grants rack up. Washington clearly see considerably more opportunities in India's open market than the largely closed shop operating in China, and is moving fast to seize them.

As part of this initiative the US Government-owned Overseas Private Investment Corp (OPIC) announced on Tuesday it was planning to invest up to USD820 million in India's renewable energy sector by the end of 2011. Just three weeks earlier OPIC said it was putting USD198 million into two clean energy private equity funds with the investment weighted toward India.

On Monday the Export-Import Bank of the United States (Ex-Im Bank) revealed it has lent USD75 million so far this year for Indian solar-power projects and claimed to have another USD500 million in the pipeline. The US Trade and Development Agency (USTDA) is also doing its bit by chipping in USD1.4 million for two energy sector projects.

During a roundtable organised by the US-India Business Council on supporting India's infrastructure sector, OPIC's President and CEO Elizabeth Littlefield revealed that USD520 million would be invested in India's renewable energy sector, and a further USD300 million of private equity investments with a particular nod to small solar companies. (It was hinted that the USD198 tranche for private equity funds was part of this package.)

The roundtable came as Clinton and Krishna underlined the importance of the cleantech sector, discussing new plans for implementation and outlining substantial funding projects, including expanding some existing plans. The two politicians emphasised the importance of the US-India Partnership to Advance Clean Energy (PACE) signed in 2009 to improve energy access and promote low-carbon growth through the research and deployment of clean energy technologies.

In May the two countries established a Joint Clean Energy Research and Development Center which will use USD25 million from the US Department of Energy over five years for research and development focused on transformational scientific and technological co-operation on building efficiency, solar energy and advanced biofuels.

Solar Mission

India's ambitious Jawaharlal Nehru National Solar Mission is receiving strong support from the US Em-Im Bank, which is the the first international financing institution to finance projects falling under the Mission, and has also been among the first first to approve financings under the solar-power policy of the state of Gujarat. According to its chairman, Fred Hochberg, Ex-Im Bank has approved financing totalling approximately UD75 million for four solar projects in India and has about USD500 million of India solar projects in the pipeline that will generate an estimated 315-MW of solar power.

In its latest disbursements a USD16 million, 18-year loan has been made available to Azure Power to purchase thin-film solar photovoltaic modules from First Solar for a 5-MW solar power plant in Rajasthan. The bank also lent Punj Lloyd USD9.2 million on a 16.5 year term to buy thin-film PV modules from Abound Solar for another 5-MW solar plant in Rajastan. Repayments will be made from cash flows generated by the sale of electricity to NTPC Vidyut Vyapar Nigam (NVVN), which Indian's Central Government has provided special power-price incentives under the National Solar Mission.