The demand of power in Asia’s third-largest economy is all ready to outrage as the economy grows and more people move from the rural areas to the urban areas. The estimated electricity demand of India is studied to be quadrupling in the next two decades to being 690 gig watts (WT), and that could require rapid growth in the transmission and generation capacity.
The biggest and the largest pension funds from all over the world require long-term returns on the green investments and are looking for deals in the solar power sector of India. The prime minister of India, Mr. Narendra Modi is heard to be investing around 6700 Crores in the next five years.
The international investors are targeting just on the India’s solar power generation, funding the solar parks of a larger-scale. The Canada pension plan investment board (CDPQ) has 20000 crores in the net assets and it is planning to invest in the Indian solar sector with the collaboration of Azure Power. It is a top-listed firm with about 1 gigawatt capacity of solar energy at various developmental stages.
Plans of the Canadian Board with the Indian Power Sector
The Canadian board is heading to do more with the Indian solar panel systems. Their approach is to pick the right associate partner and build a top class platform that can be sustained for several years. Their plans are quite specific and to the point, they have been thinking about doing so since a long time and they have given a word not to rule out from this project to other solar ventures in future.
There are numerous other international investors that have already stepped into India’s renewable energy sector, such as Brookfield asset management from Canada’s, Dutch fund manager APG, the Goldman Sachs’s private equity arms, JP Morgan, Morgan Stanley, Enel, Engie, and the European utilities.
Last year the APG Asset Management agreed to the deal of combined investment of 850 crores with India’s Piramal Enterprises into the solar power, is now looking for more exciting deals in and across the country. Maybe they can find some thrilling projects sooner or later. The executive director at Kotak Investment Banking, Mr. Alok Verma has advised companies on renewable deals said that he expects at least 5 gigawatts of solar power to be added from the upcoming year from which most of them is supported by the overseas funds.
Chances of High Expenditure of Power In Future
The capacity of Solar power generation in India has incredibly tripled in less than three years to over 12 gigawatts, aided by the lower module prices and borrowing rates and a government drive, but combining them all, that is still only around 4 percent of the total power capacity of about 315 GW. The world’s top solar producer, china, has doubled more than its capacity of last year, to 77.42 GW.
Suyi Kim, Canada’s largest pension manager and Asia pacific head at CPPIB thinks that solar appears more characteristic and attractive in India than the wind power installation. According to reports, Kim hasn’t made any announcement of investment plans in particular but neither denied it.
Investors could face the payment delays from India’s power distribution firms that are highly in debt and some experts noted that the bidding for projects is too violent in the government auctions, with prices rising more than 70 percent since 2010. Power can only be produced under bright light, but the problem arises here, they need additional costs for using diesel generators at night to use solar power.