<b>Vandana Gombar:</b> There is a buzz, now let's plug the holes

A slew of announcements raises hope of reaching the 175 Gw target for renewable energy capacity by 2022. That is, if supporting transmission infrastructure, land and permits are in place

There has been quite a buzz in India's renewable energy industry in the last few weeks. The announcement that stands out is the $20-billion solar plan unveiled by Japan's SoftBank, with partners Bharti and Foxconn. This has strengthened the belief that finding investors and investments to get to the targeted 175-gigawatts of renewable energy capacity by 2022 is not the challenge; it is rather the lack of supporting transmission infrastructure, the denial of access to land and delays in required permits that could trip up plans. Though the Power Grid Corporation of India does have a "Green Corridor" roadmap, there are question marks about its adequacy, and the rate of progress on it. Listed below are some of the recent announcements:

SoftBank's $20 billion proposal: The plan is to add 20 Gw of solar power generating capacity, and possibly invest in manufacturing locally too. The money is to be invested over a decade with the pace being decided by the level of support available from the government. The first project is expected to start in 12-18 months.

SunEdison's $4 billion plan: Sun-Edison announced in January its intention to invest $4 billion to build a solar panel factory in India in partnership with Adani. Construction of the plant - which will have 7.5 Gw of annual production capacity - is to begin this year.

Trina Solar's $500 million plant: The world's biggest supplier of panels will invest in a 2 Gw plant in partnership with Welspun Energy. The location will be Gujarat or Andhra Pradesh. "Next year, India will become our third-largest market," said Zhiguo Zhu, Trina Solar's senior vice-president.

India Infrastructure Finance Company's green funding plan: The US Agency for International Development signed an agreement with IIFCL Asset Management Company to assist it "in the creation of green bonds and an infrastructure debt fund-mutual fund worth $665 million", a statement from the aid agency said.

Three gigawatts and Rs 2,100 crore: The state-run Solar Energy Corporation of India (to be restructured and renamed Renewable Energy Corporation of India) plans to invite bids for three gigawatts of capacity spread across five states - Madhya Pradesh, Uttar Pradesh, Gujarat, Karnataka and Tamil Nadu - before the fiscal year ends in March 2016.

On offer is viability gap funding of Rs 2,100 crore.

Loans for solar rooftops: The Indian Renewable Energy Development Agency has launched a loan programme for rooftop plants, offering interest rates of 9.9-10.75 per cent to system aggregators and developers for projects of 20 Kw to 1 Mw. Incidentally, 40 Gw of rooftop installations are targeted by 2022.

Renewables are priority lending: The long-standing demand of the industry to treat loans for renewable energy projects as priority sector lending was accepted. However, the limit of Rs 15 crore per borrower - and Rs 10 lakh per household - would restrict the flow to smaller solar projects and rooftop plants.

Dollar-denominated contracts: State-owned National Thermal Power Corporation is set to invite bids for dollar-linked power contracts. A fund will be created by the company to manage the currency risk. There are reservations in some quarters about a government-owned company taking on the currency risk, but the move could encourage overseas investors, and lead to a reduction in borrowing costs.

Solar power set to surpass wind: It became apparent last month that India's solar installations this year (ending March 2016) will surpass wind installs for the first time. While 2.4 Gw of wind plants are expected to be constructed, solar plants are set to exceed 2.5 Gw.

India set to be among top 5: Bloom-berg New Energy Finance projections show India figuring among the five largest countries for solar installations in 2015 (see table). The sixth country on this list is Germany, with 1,445 megawatts forecast to be installed this year.

The author is Editor, Global Policy for Bloomberg New Energy Finance