India’s maiden sovereign green bond sale fetched 80 billion rupees ($1 billion) of securities, including 40 billion rupees each of 10-year and 5-year notes, the Reserve Bank of India said in a statement on Wednesday. To fund its transition to cleaner energy at affordable rates, the government sold the 10-year bond priced at a coupon of 7.29%, six basis points lower than the similar maturity sovereign debt, and compared with 7.31% estimate in a Bloomberg survey.
Indian companies have over $26 billion in outstanding green debt and the green bonds are expected to further deepen the market. Bloomberg pointed out that while a similar offering on Feb. 9 will take government’s green bond sale to $2 billion, it’s only about 1% of its overall borrowing this year.
Power ministry wants issuance of tax-paid green bonds to raise cheaper finance for green projects
According to Reuters, India’s power ministry has proposed to allow power finance companies Power Finance Corp (PFC), REC Ltd, and Indian Renewable Energy Development Agency (IREDA) to issue tax-paid green bonds to raise cheaper finance required for green projects. The ministry has proposed that the issuer will pay the tax for it instead of the investor, to get higher returns on investment, reported Reuters. The proposals are part of a set of demands the power ministry wants to be included in the federal budget due on Feb.1, the officials said. The power ministry has sought the finance ministry’s permission to allow issuance of tax-paid bonds by PFC, REC and IREDA, the report claimed.
India and the UAE will soon have renewable electricity grid link, says Power Minister
Power Minister Raj Kumar Singh said India and the UAE are close to a “major agreement” on a renewable energy interconnection between the two countries. India is the current president of the International Renewable Energy Agency’s (IRENA) assembly that held a meeting recently in Abu Dhabi. Without specifying s time frame, Singh told Reuters the agreement was awaiting final approvals.
“There is a major agreement for an interconnection between the UAE electricity grid, and the Indian grid,” Singh said, adding that this would be under the One Sun, One World, One Grid (OSOWOG) initiative by a group of countries to create renewable energy networks. The OSOWOG initiative, first proposed by Indian Prime Minister Narendra Modi, aims to transfer renewable energy power through connecting grids.
Energy saving certificates to start again after 11 months of halt
The Bureau of Energy Efficiency (BEE) resumed the trading of Energy Saving Certificates on January 17, after it was suspended last February due to administrative issues, reported Mercom. The certificates will be under the Perform, Achieve and Trade (PAT) mechanism for designated consumers, which was finalised in March 2019. The trading will be held every Tuesday on Indian Energy Exchange, and Power Exchange India Limited (PIXL). PAT is a market-based mechanism which claims to reduce energy intensive consumption amongst large industries through certification of excess energy saving which can be traded, Mercom report said. The industries which consume more are given higher targets for specific financial years compared to those which are more efficient. Those units which exceed their targets get the certificated and those who fail to meet the targets have to purchase the certificates. Such plants are also liable for penalties under Energy Conservation Act.
The recently formed Energy Conservation Act aims to enforce the purchase of energy saving certificates whose consumption exceeds the norms.
Europe plans own Net-Zero Act, to stop European business from moving production to the US, China
To check the exodus of industry to the US to cash in on subsidies offered under Biden’s new Inflation reduction Act, the EU plans to pass a legislation dubbed the Net-Zero Industry Act to speed up the granting of licences and permits for green tech. The EU expects it will stop European businesses from moving production to the US which is offering $396bn in subsidies and tax breaks for “green technology” companies. Meanwhile, The European Commission chief, Ursula von der Leyen, has pleaded with Washington to allow European companies to access trillions of dollars in US green subsidies.
Ursula von der Leyen, head of the European Commission, announced at the World Economic Forum in Davos that the European Union will create extensive new clean energy subsidies to keep firms from moving to the U.S. and China. The E.U.’s plans appear to involve heavy subsidies of its own to compete with the U.S. and China. Von der Leyen also announced that the organization will temporarily adapt the E.U. state aid rules to speed up and simplify permitting for clean energy production. It’s not clear yet how much money will be given for the new clean energy subsidies — that figure will be part of the budget review later this year.
Norwegian fund partners with India’s Acme in RE projects, invests in Punjab to fight stubble burning
India’s renewable energy company Acme Group, which has projects across 12 States, has partnered with Norwegian investment fund Norfund to invest in developing new renewable power projects in India. Together with pension fund KLP, also based in Norway, it has also bought a 49% stake in a 420 MW DC (300 MW AC) solar plant being built in India, PV magazine reported.
As a solution to stubble burning in Punjab, the Norfund, owned by Norwegian government has also made an equity investment of INR 500 crore ($61.3 million) in Punjab-based SAEL that has developed biomass power generation to tackle stubble burning. SAEL has over 20 projects solar and agri waste-to-energy space with a business model where it purchases paddy crop residue/paddy straw from farmers to produce energy at its biomass power plants.