Lok Sabha Question No. 3178 (UNSTARRED), answered on 2015-12-17
Subject: Foreign Investment in Solar Energy
Ministry: NEW AND RENEWABLE ENERGY
Asked by: RAJEEV SHANKARRAO SATAV, VIJAYSINH MOHITE PATIL, HEENA VIJAYKUMAR GAVIT, DHANANJAY BHIMRAO MAHADIK, SUPRIYA SADANAND SULE, JAYAKUMAR JAYAVARDHAN

## GOVERNMENT OF INDIA MINISTRY OF NEW AND RENEWABLE ENERGY

## LOK SABHA UNSTARRED  QUESTION NO. 3178

TO BE ANSWERED ON 17.12.2015

## FOREIGN INVESTMENT IN SOLAR ENERGY

## 3178.  SHRI SATAV RAJEEV:

SHRI MOHITE PATIL VIJAYSINH SHANKARRAO:

DR. HEENA VIJAYKUMAR GAVIT:

SHRI DHANANJAY MAHADIK:

SHRIMATI SUPRIYA SULE:

DR. J JAYAVARDHAN:

Will the Minister of NEW AND RENEWABLE ENERGY be pleased to state:

(a) whether the Government has entered/proposes to enter in an international solar alliance with nations producing solar energy i.e. 'sunshine nations';

(b) if  so,  the  details  thereof  along  with its  objectives and the benefits likely to accrue to the country from such alliances;

(c) whether the Government expects foreign investment for setting up a solar manufacturing base in the country, if so, details thereof;

(d) the quantum of foreign investment expected in the country for solar sector; and

(e) the other steps taken/being taken by the government for sustainable development goals in solar energy?

## ANSWER

THE MINISTER OF  STATE  FOR  POWER,  COAL  &  NEW  AND RENEWABLE  ENERGY (INDEPENDENT CHARGE) (SHRI PIYUSH GOYAL)

(a)&(b): The International Solar Alliance was launched on 30 November 2015 on the sidelines of the 21st Conference of Parties to the United Nations Framework Convention on Climate Change (UNFCCC), at Paris, France.

International Solar Alliance (ISA) has been envisioned as a coalition of 121 solar resource rich countries situated fully or partially between Tropic of Cancer and Tropic of Capricorn, to address their special energy needs and to provide a platform to collaborate on addressing the identified gaps through a common approach.  The key focus areas of ISA include promotion of technologies  and  investment  in  the  solar  sector,  facilitation  of    projects  and  programmes, development of  innovative financial mechanisms to reduce cost of capital, builds a common Knowledge  e-Portal  and  facilitate  capacity  building  for  promotion  and  absorption  of  solar technologies and R&D among member countries.

(c): Solar power plants are being set up in the country mostly by private developers.   Setting up solar manufacturing base is a commercial decision to be taken by the private investors/manufacturers.

(d): The investment for solar energy projects is arranged by the project developers, on project to project basis, from various sources including from foreign direct investment.

Low cost International funding for solar roof top projects tied up so far is as under :-

- i. One billion Euro loan from KfW Germany: Memorandum of Understanding (MoU)  was signed between Government of India and Government of Germany on 5 October, 2015 for (i) Co-operation on solar rooftops (ii) Solar parks and solar zones, and (iii) Solar off-grid applications;
- ii. US$ 500 million loan from World Bank: Approved by Department of Economic Affairs. State Bank of India will provide loans to system aggregators for solar rooftops;
- iii. US$  500  million  loan  from  Asian  Development  Bank:  Approved  by  Department  of Economic Affairs. Punjab National Bank will provide loans to for solar rooftops.

(e): For encouraging solar power generation in the country, the Government is providing the following incentives to solar power developers:

- i. Grant of subsidy on off-grid applications.
- ii. Provision  of  Renewable  Purchase  Obligation  (RPO)  for  solar  has  been made in the proposed National Tariff Policy.
- iii. Generation Based Incentives (GBI) and facility for bundling power for grid connected solar power  projects through various interventions announced from time to time.
- iv. Grant of Viability Gap Funding (VGF).
- v. Renewable Energy Sector has been awarded Priority Sector Lending status.
- vi. Concessional Import duty/Excise duty exemption for setting up of solar power plants, accelerated depreciation and tax holiday.
- vii. Roof-top Solar PV systems have been made eligible for home loans.
- viii. Tax free green bonds of INR 5,000 crores.
- ix. Creation of Payment Security Mechanism.
- x. Development of solar parks.
- xi. Setting up of Green Energy Corridors.
12. xii    Waiver  of  wheeling  charges  on  Inter-State  Transmission  System  (ISTS) network.