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India’s Energy Sector Catches The Fancy Of US

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Energy is the new Gold. There is no surprise how important energy (both renewable and non-renewable) is for sustainability. With energy demand-supply gap widening by the day, there is an impetus to generate ‘Smart’ energy or in other words find ways to generate and use energy efficiently. Green investments are a necessity for a greener and fresher future tomorrow.

Well, the energy sector in India might just get the much need capital boost from none other the US. India’s energy sector seems to gotten the fancy of US and India might see lot of US based investments happening in this sector.

Case in point is the recent funding of 2 feasibility studies provided by US Trade and Development Agency (USTDA) estimated at over $1.4 Mn. The first one is USTDA funding for a $7,19,985 feasibility study to Astonfield Renewables Private Limited to prepare the design and deployment of two solar photovoltaic power projects in West Bengal (5 MW) and Karnataka (10 MW).

The other being $6,86,447 grant to North Delhi Power Limited (NDPL) for the implementation of smart grid technology in India. These feasibility studies are expected to pave the way for future large scale investments in the energy sector in India with a specialized focus on green energy and smart energy solutions.

Clean Energy To See Increased Investments

Even as the energy sector on a whole is expected to see renewed interest from the US, maximum focus is on clean energy segment. Renewable energy is fast becoming a necessity as the traditional energy sources become scarce and the demand becomes scarce.

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Renewable energy is a capital intensive sector with long gestation periods in terms of returns. Investment support from the US is expected to come in handy as companies in India working on renewable energy would get to see more funds to carry out R&D.

India and US seem to be working together as far as the development of clean energy sector is concerned in India. A lot of joint initiatives and funding promises have happened in 2011 including the funding of feasibility studies mentioned above. There is a much larger corpus envisaged for Clean energy in India

  • US government owned Overseas Private Investment Corp (OPIC) recently approved two new private equity funds ($600 Mn investment corpus) with  approximately $350 million targeted at Indian hydro, biomass, wind, and solar power projects
  • There is also  a $300 million South Asia Clean Energy Fund by OPIC, nearly all of which will target India
  • India and US are going to establish  a Joint Clean Energy Research and Development Center that will mobilize $25 million of Department of Energy funding over five years for research and development focused on efficiency, solar energy and advanced biofuels

Like with all investments, only time will tell how much of the proposed sum actually materializes but the focus and commitment looks very real. Indian energy sector and especially green energy initiatives are expected to benefit from investment and hopefully technical support from the US in coming years.

I am not entirely sure if these funds will target investments in existing projects or they will have a open policy to encourage brilliant folks to be a part of the clean energy sector in India. If that happens, we might see a lot many clean energy entrepreneurs coming up in India!

What are your thoughts on India’s energy sector? US sure seems to be overweight on the sector and is ready to invest sizable amounts to foster innovation in clean energy from Indian soil

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