Indian RE Sector Attracted FDI Worth $7.4B Since April 2000

According to a report by the India Brand Equity Foundation (IBEF), the country's renewable energy sector attracted foreign direct investments (FDI) worth $7.48 billion between April 2000 and December 2018.

The IBEF report pegs new investments in clean energy space worth $11.1 billion in calendar 2018, sourcing data from the Ministry of New & Renewable Energy (MNRE) and leading consultancy KPMG.

The green energy sector boasted 28 deals and grabbed a 27 percent share of the merger & acquisition (M&A) deals in the power sector valued at $4.4 billion in 2017.

Renew Power Ventures, Diligent Power Pvt Ltd, Welspun Renewables Energy Pvt Ltd, Areva Solar Power Ltd and Ostro Energy Pvt Ltd figure among the major beneficiaries of overseas financing. Asian Development Bank (ADB), Japan-based ORIX Corporation, ENEL Green Power Development BV (Netherlands), Areva Solar Inc (USA), AIRRO Singapore Pte Ltd and ENERK International Holdings (Seychelles) have also sunk in funds on energy renewable projects.

The government allows a 100 percent FDI under the automatic route for projects of renewable power generation and distribution provided they comply with the provisions of The Electricity Act, 2003. India aims to achieve 175 GW of nameplate capacity in renewable energy generation by 2022. The envisaged portfolio includes 100 GW of solar capacity addition and 60 GW in wind power capacity.  Globally, India is the third largest solar market and has the fourth highest installed wind power capacity. As on December 2018, Tamil Nadu, Gujarat and Maharashtra had finalized wind power bids of 500 Mw each.

As India looks to meet its energy demand on its own, which is expected to reach 15,820 TWh by 2040, renewable energy is set to play an important role. Replacing coal-fired plants with renewable installations is expected to save around Rs 54,000 crore annually for the country on account of shrinkage in power costs.

“Over the last few years, there has been an increase in percentage contribution of renewable energy to total installed capacity. In 2013-14 the contribution was 12.92 percent which has increased to 21.21 percent by December 2018″, the IBEF report noted.

According to data released by the Department of Industrial Policy and Promotion (DIPP), FDI inflows in the Indian non-conventional energy sector between April 2000 and June 2018 stood at US$ 6.84 billion. More than US$ 42 billion has been invested in India’s renewable energy sector since 2014.

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