Tata Cleantech May Fund $400 Million Projects in India
Tata Cleantech Capital Ltd. may fund as much as 25 billion rupees ($401 million) of renewable and energy-efficiency projects in India as costs for coal-based power prompt companies to turn to alternatives.
¡°The combined cost of grid power and diesel generators that many companies use today is higher than solar,¡± Avijit Bhattacharya, chief executive officer of the lender set up jointly by Tata Capital Ltd. and International Finance Corp., said in an interview in Mumbai.
That¡¯s creating an opportunity to fund clean-technology projects that help companies reduce their power bills without relying on subsidies, he said.
Solar power can be produced for as low as 8 rupees (13 cents) per kilowatt-hour compared to the 11 rupees that some commercial buildings outside Mumbai pay for electricity, he said.
India¡¯s 29 gigawatts of renewable capacity was mostly built with the help of government subsidies and tax breaks. In the past year, falling renewable costs and rising fossil-fuel prices have made it possible in some cases for wind and solar to compete in the power market without support.
The average tariff for electricity sales in Maharashtra state, home to the financial hub of Mumbai, has risen by 71 percent in two years, according to data from the government¡¯s Planning Commission and the Maharashtra Electricity Regulatory Commission.
SunEdison Model
Solar installations and energy-efficiency projects require large, initial investments and generate savings over time. Tata Cleantech, which began operations in April, plans to fund energy-services companies that will allow customers to reap those rewards without the capital outlay.