Oct 29 2010
The Indian Government has plans of setting up a green bank with a national clean energy fund of 5000 crores. This fund would be available on a yearly basis by applying a cess on imported and domestic coal. This bank would support projects that generate electricity from renewable sources, such as solar, wind, tidal and so on. Currently the renewables provide only 6000 MW out of India’s total 150,000 MW power capacity.
According to MNRE (Ministry for new and renewable energy), India could generate almost 80,000 MW from sources which are non-conventional. The Union MNRE Minister, Dr. Farooq Abdullah, confirmed that the ministry was working out on the specifics for the green bank. They wanted to utilize only a section of the national clean energy fund for these projects. He further stated that most of the funds would be accessible to other ministries that are participating to protect the environment, and decrease India’s addiction to fossil fuels. The Finance Minister, Pranab Mukherjee allocated this fund in the 2010-2011 Union Budget. According to a spokesman from the finance ministry, a figure of 4500 – 5000 crores is put aside for this year. Both domestic and imported coal attracts a levy of Rs. 50 per ton cess. The cess would be used to fund research projects and innovations in clean energy technology.
The green bank would be connected to IREDA (Indian Renewable Energy Development Agency), which is a non-banking financial company, owned by the government. IREDA itself may be restructured to be the green bank by the ministry. The final details are yet to be decided.
IREDA, created in 1987, manages energy conservation and renewable energy projects, and tax free bonds of Rs. 250 crores, lending funds to multilateral agencies involved in environmental protection, and to the Indian banks. This concept of a green bank is not original, as already such a bank exists in Nepal from 2006, the Clean Energy Development Bank of Nepal, a Joint venture with FMO, a Netherlands financial company. MNRE anticipates speedy expansion of renewable energy projects, specifically in the solar sector. India already leads in wind energy generation.
Source: https://www.ireda.in/home