The Indian government’s green energy initiatives have received a major thrust with the inclusion of renewable energy as an eligible category under the Reserve Bank of India’s revised guidelines on Priority Sector Lending – Targets and Classification for scheduled commercial banks operating in the country.
The RBI’s July 2014 guidelines on PSL covered six categories – agriculture, micro and small enterprises, education, housing, export credit and others. The recently revised guidelines added the categories of medium enterprises, social infrastructure and renewable energy to that list.
In the renewable energy category, bank loans up to a limit of Rs.15 crore to borrowers for purposes like solar based power generators, biomass based power generators, wind mills, micro-hydel plants and for non-conventional energy based public utilities such as street lighting systems and remote village electrification are eligible to be classified as priority sector sanctioned loans, as per the revised guidelines. For individual households, the loan limit has been fixed at Rs.10 lakh per borrower.
The Ministry of New and Renewable Energy is engaged in promoting private investment in renewable energy through an attractive mix of fiscal and financial incentives, which includes capital subsidy through Modified Special Incentive Package Scheme and excise and custom duty exemption. The government has also allowed 100 per cent foreign direct investment in renewable energy.
India’s renewable energy potential is estimated at 897 GW. Solar has the highest potential with 749 GW followed by wind (103 GW), bio-energy (25 GW) and small hydro power (20 GW). The MNRE has set a target for generation of 175 GW grid power from various renewable energy sources by 2022. This includes 100 GW from solar, 60 GW from wind, 10 GW from bio-power and 5 GW from small hydro power.
During RE-INVEST 2015, the first Renewable Energy Global Investment Promotion Meet and Expo that was organised by the MNRE from February 15-17 in New Delhi, a total of 387 companies including several global firms committed to build green energy capacity aggregating 272 GW in the country during the next five years. At the same event, as many as 30 banks and financial institutions committed Rs.3,52,640 crore for financing green energy projects of 70,505 MW total capacity up to 2021-22.