The Indian government has chalked up big plans to create long-term sustainable energy solutions through solar power. However, certain modalities need to be ironed out to make the ambitious plan actionable and feasible
Even while the Copenhagen talks on climate change are going on in full swing, the Indian government is drawing up its own blueprint for creating long-term sustainable energy solutions for the country. Its ambitious Jawaharlal Nehru National Solar Mission is a bold step in this direction. However, a robust and actionable plan for implementation is needed to ensure that the vision is transformed into reality.
The mission, which forms a part of India’s National Action Plan on Climate Change, aims at contributing towards the country’s long-term energy security as well as ecological security. It envisages installed solar capacity addition of 20,000 MW by the end of the 13th Five Year Plan in 2022. An analysis done by Greenpeace, a non-profit organisation, shows that this initiative will ensure an annual reduction of 434 million tons of carbon dioxide (CO2) emissions every year by 2050. Apart from combating climate change, this mission would also serve to alleviate poverty and create employment opportunities.
As a step towards this direction, the government has proposed capacity addition of 1,300 MW over the next three years. Based on the success of the first phase of implementation, the government will finalise the strategy for further action on this front. The Cabinet has already approved setting up of 1,100 MW of grid solar power and 200 MW capacity of off-grid solar applications utilising both solar thermal and photovoltaic technologies in the first phase of the mission. Additionally, the mission will focus on research and development (R&D) and human resources development (HRD) to develop and strengthen Indian skills and enhance indigenous content to make the mission sustainable.
The government will provide incentive of 20% capital expenditure during the first 10 years for the units in special economic zones (SEZs), and 25% of the capital expenditure in non-SEZ units. Any unit can claim incentives in the form of capital subsidy or equity participation.
The Indian government’s Special Incentive Package Scheme (SIPS) for its proposed photovoltaic (solar panels) and poly-silicon (a component used for integrated circuits and CPUs) project in Kutch district, Gujarat, has received 18 applications. The applicants include Titan Energy Systems, Tata BP Solar Power, and PV Technologies India, a subsidiary of Moser Baer, and the latest, Euro Multivision. However, none of the players have reported full financial closure. Other Indian companies involved in solar panels are Bharat Heavy Electricals Ltd (BHEL), XL Telecom, Kaveri Telecom Products, Surana Telecom etc.
For now, the solar energy mission exists only on paper. While some of the steps already taken are commendable, the success of the plan would hinge on strong participation from the private sector, technological expertise and co-operation from foreign players and having a firm regulatory framework in place.
RBI’s positive comments on capital inflows helped Indian markets gain momentum
The Sensex gained 64 points from the previous day’s close, ending the day at 17,189, while the Nifty closed at 5,135, up 23 points.
Telecom stocks surged after the central bank allowed telecom firms to access overseas markets to fund their bids for 3G spectrum allocation. Bharti Airtel rose 3% while Reliance Communications, Idea Cellular and Spice Communications rose 2%, 4% and 1% respectively.
Hindalco Industries is reportedly raising Rs4,500 crore ($966 million) in debt to fund a new alumina refinery. The refinery will have an annual capacity of 1.5 million tonnes, and will be located in Orissa. The facility is expected to start production in July 2011 and involves capital expenditure of around Rs6,500 crore. The stock was up 1%
Valecha Engineering, Era Infra Engineering and Gayatri Projects rose by 1% each on reports that the government had set a target of spending $20 billion a year on road construction.
Gammon India remained flat after the company’s overseas unit SAE Powerlines, Italy, secured a $31-million power transmission project in Tanzania.
Simplex Projects rose 3%, after the company bagged three contracts aggregating Rs407 crore.
Syndicate Bank gained 3% on reports that the bank is in active talks to buy a 20%-25% stake for around Rs300 crore in Bharti Axa Life Insurance.
KPIT Cummins Infosystems declined 2%, after a promoter group company, Proficient Trading & Investment, pledged 43 lakh shares representing 5.51% of the equity capital of the company.
During the day, D Subbarao, governor of the Reserve Bank of India (RBI), said that capital flows into India are in line with requirements and as of now there is no concern of the flows building asset price bubbles. If and when there are excess capital inflows, the apex bank will have to respond to that situation, he added.
After trading hours on Wednesday, RBI said that it would withdraw from 1 January 2010 some concessions on overseas borrowing for Indian firms introduced during the global credit crisis, although it also eased rules for the infrastructure and telecom sectors.
A facility for Indian companies to buy back their foreign currency convertible bonds under the automatic route and approval route would be discontinued from January 2010 due to the improvement in the equity market. The central bank said that it would allow non-banking financial companies which are focused on financing infrastructure projects to borrow from overseas markets under the approval route. It also extended by a year a rule which allowed firms involved in developing integrated townships to borrow overseas. The central bank also allowed telecom firms to access overseas markets to fund their bids for 3G spectrum, effective immediately. The government plans to auction 3G spectrum in January 2010.
The government announced that the food price index rose 19.05% in the year to 28 November 2009. The fuel price index rose 0.06% while primary article index jumped 13.9% in the year to 28 November 2009.
Shyamala Gopinath, deputy governor, RBI, said that the new overseas borrowing norms are part of India’s capital account management and they do not indicate capital control.
An economic adviser to the prime minister, C Rangarajan, has said that India could absorb inflows of up to $100 billion in the current fiscal year, well above projected levels of $57-$60 billion.
Prime minister Manmohan Singh said that the country needs to sharply increase public spending on agriculture, particularly on irrigation and technology, to raise farm output. The government is also considering rice imports to ensure that the country has adequate grain stocks.
Meanwhile, Barclays said that it was cooperating with the Securities and Exchange Board of India (SEBI), after the Indian regulator barred the British bank from transacting new offshore derivative instruments. SEBI said in an order that Barclays had not correctly disclosed details of the derivatives that are used by foreign investors to buy Indian equities. The order will stand until Barclays shows that it has adequate systems and controls in place for disclosing transactions in offshore derivative instruments, SEBI said.
During the day, Asia’s key benchmark indices in Hong Kong, Japan, Singapore and Taiwan were down between 0.19%-1.53% while indices in China, Indonesia and South Korea rose between 0.19%-1.14%.
Orders for Japanese machinery—a key indicator of business investment—declined 4.5% in October, following a rise of 10.5% in September.
On Wednesday, 9 December 2009, the Dow Jones Industrial Average gained 51 points while the S&P 500 and the Nasdaq Composite gained four and 11 points respectively.
US treasury secretary Timothy Geithner extended the government’s $700 billion financial bailout fund to October 2010, saying that it was still needed for “significant challenges” in the economy. He also pledged to deploy no more than $550 billion from the Troubled Asset Relief Program, allowing the remainder to reduce budget deficits.
In premarket trading, the Dow was trading 25 points higher.
The discussions are being held with infrastructure development and finance major IL&FS, along with some other potential partners for sale of a minority strategic stake by RIL in Reliance Haryana SEZ
With an aim to rope in a strategic partner for its Haryana special economic zone (SEZ) project, corporate giant Reliance Industries Ltd (RIL) is believed to be in talks with Infrastructure Leasing & Financial Services Ltd (IL&FS) and a couple of other players for part-sale of its stake, reports PTI.
The discussions are being held with infrastructure development and finance major IL&FS, along with some other potential partners for sale of a minority strategic stake by RIL in Reliance Haryana SEZ Ltd, sources said.
However, it could not be ascertained how much stake RIL would offload in the venture and what was the valuation it was looking at for the stake sale, sources said, adding that the talks were still in the preliminary stages.
In its annual report for 2008-09, RIL had said that it was planning to bring in a strategic business partner for its Haryana SEZ project to maximise investment potential in the joint venture unit.
The SEZ was to originally come up on 10,000 hectares at an investment of over Rs25,000 crore, but the size was scaled down to 5,000 hectares after the government put a cap on land acquisition for such projects.
RIL and the Haryana government had entered into a deal in 2006 for setting up the multi-product SEZ, at that time billed as India's largest and expected to attract about Rs1,00,000 crore of third-party investments.