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Policy, better discom health needed for green energy space

(From left) Deep Gupta, MD, Macquarie Asset Management, co-head of Southeast Asia and India; Kavita Saha MD, infrastructure, India, CPP Investments; Neeraj Menon, partner, Trilegal; and Nagesh Basavanhalli, group CEO, Greaves Cotton Ltd.Premium
(From left) Deep Gupta, MD, Macquarie Asset Management, co-head of Southeast Asia and India; Kavita Saha MD, infrastructure, India, CPP Investments; Neeraj Menon, partner, Trilegal; and Nagesh Basavanhalli, group CEO, Greaves Cotton Ltd.

  • Regulatory certainty is fundamental to investments in the renewable energy space, Deep Gupta, managing director of Macquarie Asset Management said

India must have a definitive and sustainable policy framework to promote green energy and ensure the financial health of state-run electricity distribution companies (discoms) to encourage more private sector participation, experts said.

Regulatory certainty is fundamental to investments in the renewable energy space, Deep Gupta, managing director of Macquarie Asset Management and co-head, Southeast Asia and India, said at Mint’s India Investment Summit, which was held on 15 March.

According to Gupta, stability in regulations will attract higher investment and a lot of capital will flow into the green economy, with India driving innovation globally. “Some of the risks that we see today are based on obligations around the contracts being breached and not enough thought goes into what obligations would be in the future. In the road sector, for instance, over a period of time the concession framework has come to a level that is a lot more bankable." India has a fair judicial process, but that can be fast-tracked, he added.

Kavita Saha, managing director, infrastructure, India, CPP Investments, said the size and scope of investments in green energy have increased over the years. “I still remember, in 2006, advising a 120-megawatt project, which was probably the largest renewable power facility in the country. And now you are talking about hundreds of gigawatt-scale projects. However, the financial health of the discoms remain a concern for investments in the sector. The problem has been recognised by the government and steps are being taken," Saha added.

A conducive environment must be ensured for the green economy and allied sectors in India to grow, Chetan Maini, co-founder and chairman, Sun Mobility, said. Now, it is the right time when macro conditions have come and paves the way for electric mobility. “Linking of energy and mobility is going to make a huge shift over the next 10 years both for sustainability and cost."

Neeraj Menon, partner, Trilegal said innovative financing is required where the risks are brought to a manageable level.

The emphasis on the green economy gained momentum amid the pandemic, with the Indian government showing intent. Prime Minister Narendra Modi’s commitment at the COP-26 Summit in Glasgow in November to achieve net-zero carbon emission by 2070 has brought about further urgency to turn towards greener and environment-friendly resources through a stable regulatory framework.

The budget for FY23 outlined the government’s focus on a green and circular economy. “We will promote the use of public transport in urban areas. It will be complemented by clean tech and governance solutions, and special mobility zones with zero fossil-fuel policy, and EV vehicles," finance minister Nirmala Sitharaman said in her budget speech.

She also announced a battery swap policy and interoperability standards and sought private sector participation to develop sustainable and innovative business models for battery or energy-as-a-service.

“The government is playing a huge part with the faster adoption and manufacturing of hybrid and electric vehicles (FAME-II) scheme, and states governments are also jumping in," said MD & Group CEO Nagesh Basavnahalli,Greaves Gotton 

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