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					</table><p>The &#8220;Financing the Renewable Energy Sector&#8221; session at the Mercom India Renewables Summit 2024 brought together key industry leaders to discuss the current landscape, challenges, and opportunities in financing renewable energy projects in India.</p>
<p>The panel featured Pranab Kumar Sinha, Executive Director of <a href="https://www.pfcindia.com/" target="_blank" rel="noopener">Power Finance Corporation</a>; Manjiri Bhalerao, Chief General Manager of <a href="https://www.eximbankindia.in/" target="_blank" rel="noopener">Exim Bank</a>; Hitesh Paliwal, Senior Vice-President and Zonal Head, North Zone, <a href="https://www.onlinesbi.sbi/" target="_blank" rel="noopener">State Bank of India</a>; and Vikram Sheth, Head, Investment Banking at <a href="https://www.newage.finance/" target="_blank" rel="noopener">New Age</a>.</p>
<p>The discussion was moderated by Priya Sanjay, Managing Director, Mercom India.</p>
<p>Pranab Kumar Sinha highlighted the significant funding the Power Finance Corporation (PFC) has provided to the renewable energy sector. In the past year, PFC funded around ₹600 billion (~$7.1 billion), up from ₹480 billion (~$5.7 billion) the previous year.</p>
<p>This funding has supported various projects, including wind energy and solar panel manufacturing, with notable investments in companies like Adani.</p>
<p>Sinha said PFC offers subsidized interest rates for renewable projects and is exploring funding opportunities in emerging areas such as pumped storage, battery storage, and green hydrogen.</p>
<p>However, he noted the challenges in green hydrogen projects, particularly concerning certification and cost optimization.</p>
<p>Manjiri Bhalerao discussed Exim Bank&#8217;s pioneering role in green bonds since 2015 and its commitment to sustainability. The bank operates two books under its sustainability framework: a commercial book and a book extending lines of credit to overseas governments.</p>
<p>Exim Bank aims to allocate 10% of its commercial book to the renewable energy sector by 2027.</p>
<p>Bhalerao also talked about the bank&#8217;s sustainability finance program, which covers a broad range of renewable energy projects, including small hydro and wind.</p>
<p>Exim Bank offers discounted rates, and has unique eligibility criteria that allow financing for companies involved in import/export activities or those providing significant power output.</p>
<p>Hitesh Paliwal provided insights into the State Bank of India&#8217;s (SBI) approach to renewable energy financing. He noted a muted growth in the solar sector last year, with installed capacity dropping from 13 GW to 8 GW.</p>
<p>Despite this, he was optimistic about the sector&#8217;s future, emphasizing the shift towards &#8220;innovative solar&#8221; funding focusing on climate adaptation rather than just mitigation.</p>
<p>Paliwal highlighted the advancements in solar technology, such as the transition from mono to TOPCon modules with N-type cells and the decreasing costs of solar manufacturing due to falling commodity prices. He said SBI has the capital to meet the sector&#8217;s needs and is supported by favorable state policies.</p>
<p>Vikram Sheth discussed the role of New Age in facilitating investments in India&#8217;s renewable energy sector. He pointed out that while large global funds are interested in entering the Indian market, the local ground realities can be challenging. New Age creates partnerships between international investors and local entities, including EPC players and corporate houses, to form joint ventures to address these challenges.</p>
<p>Sheth emphasized the importance of strategic investments, particularly for companies looking to fulfill their ESG agendas.</p>
<p>He cited Mercom&#8217;s analysis, based on which he estimates that India needs to add 50 GW of renewable capacity annually over the next 5-6 years, requiring around ₹900 billion (~$10.7 billion) to ₹1 trillion (~$11.9 billion) in equity per year.</p>
<p>Sheth stressed that liquidity is available as long as there is a viable growth story.</p>
<p><strong>Key Takeaways</strong></p>
<ul>
<li>Substantial Funding and Growth Potential: PFC and other financial institutions are significantly investing in the renewable energy sector, with projections of substantial market growth.</li>
<li>Innovative Financing Models: Institutions like Exim Bank and SBI are adopting innovative financing models and offering incentives to support the sector&#8217;s growth.</li>
<li>Technological Advancements: Advances in solar technology and decreasing manufacturing costs make renewable projects more viable.</li>
<li>Strategic Partnerships: Forming joint ventures with local partners can be crucial for international investors looking to enter the Indian market.</li>
<li>Challenges and Opportunities: While there are challenges, the overall outlook for the renewable energy sector in India remains positive.</li>
</ul>
<p>The session underscored the importance of diverse financing options and strategic partnerships in driving the growth of India&#8217;s renewable energy sector.</p>


Powering the Future: Insights on Financing India’s Renewable Energy Projects


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					</table><p>The uneven geographic distribution of critical mineral resources used in clean energy supply chains makes international collaboration and strategic partnerships crucial, a new report by the International Energy Agency (<u><a href="https://www.iea.org/" target="_blank" rel="noopener">IEA</a></u>) has said.</p>
<p>The report said that the three largest producer countries account for at least 70% of the manufacturing capacity for technologies related to solar panels, wind, EV batteries, electrolyzers, and heat pumps. China was dominant in all of them.</p>
<p>A big chunk of mining for critical minerals was concentrated in a small number of countries. For instance, the Democratic Republic of Congo produces over 70% of the world’s cobalt, and just three countries – Australia, Chile, and China – account for more than 90% of global lithium production.</p>
<p>In its <em>Energy Technology Perspectives 2023, </em>the IEA provides a comprehensive analysis of global manufacturing of clean energy technologies and their supply chains today. It also maps out how they are likely to evolve as the energy transition advances.</p>
<p>The report highlights the specific challenges related to the critical minerals needed for many clean energy technologies, noting the long duration for developing new mines and the need for strong environmental, social, and governance standards are hurdles.</p>
<p>The risk of tight supply chains, in turn, results in pushing up the prices for clean technologies, thereby making countries’ energy transitions more difficult and expensive, the IEA report said.</p>
<p>Increasing prices for cobalt, lithium, and nickel led to the <a href="https://mercomindia.com/lithium-ion-battery-prices-rise-for-first-time-to-151-kwh/" target="_blank" rel="noopener">rise</a> in electric vehicle battery prices which jumped by nearly 10% globally in 2022. The cost of wind turbines outside China has also been rising after years of decline, and similar trends are being seen in solar PV.</p>
<p><strong>Industrial Strategies by Major Economies</strong></p>
<p>IEA Executive Director Fatih Birol said that a new global energy economy has become a central pillar of economic strategy and every country needs to identify how it can benefit from the opportunities and navigate the challenges.</p>
<p>The report noted that major economies were combining their climate, energy security, and industrial policies into broader strategies for their economies.</p>
<p>For instance, the Inflation Reduction Act (<a href="https://mercomindia.com/inflation-reduction-act-faster-transition-clean-energy-u-s/" target="_blank" rel="noopener">IRA</a>) in the United States, the Fit for 55 package and <a href="https://mercomindia.com/eu-to-expedite-renewable-expansion/" target="_blank" rel="noopener">REPowerEU</a> plan in the European Union, Japan’s Green Transformation program, and the Production Linked Incentive (<a href="https://mercomindia.com/production-linked-incentive-solar-modules-approved/" target="_blank" rel="noopener">PLI</a>) scheme in India encouraged the manufacturing of solar PV and batteries.</p>
<p>China, it said, was working to meet and even exceed the goals of its latest Five-Year Plan.</p>
<p>Amid the regional ambitions for scaling up manufacturing, the report underscored the importance of international trade in clean energy technology supply chains.</p>
<p>Nearly 60% of solar PV modules produced worldwide were traded across borders. Trade was also important for EV batteries and wind turbine components, with China being the main net exporter today.</p>
<p><strong> </strong><strong>Future Estimates and Meeting Net-Zero</strong></p>
<p>The report suggested that if countries worldwide fully implement their announced energy and climate pledges the global market for key mass-manufactured clean energy technologies would be worth around $650 billion a year by 2030, three times today’s level.</p>
<p>Birol said, “If everything announced as of today gets built, the investment flowing into manufacturing clean energy technologies would provide two-thirds of what is needed in a pathway to net zero emissions.”</p>
<p>However, the report found only 25% of the announced manufacturing projects globally for solar PV were under construction or beginning construction. The number was around 35% for EV batteries and less than 10% for electrolyzers.</p>


Industrial Strategies Key to Tackling Global Energy Challenges: IEA

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