Indian firms make killing out of clean technologies

Times of India , Tuesday, July 15, 2008
Correspondent : Nitin Sethi
NEW DELHI: Investments in clean technologies are riding a green wave into India. In 2007, Green India Inc raised $1.4 billion through convertible bonds from the international market even as it picked up $628 million from the domestic stock market.

Indian companies are at the forefront of a trend in global investments in clean technologies like wind and solar power — an increasing drift of money from the developed countries towards developing economies of India, China and Brazil. The United Nations Environment Programme has revealed this in a recent report 'Global Trends in Sustainable Energy Investments'.

2007 was a breakthrough year for the Indian green energy corporates — they had never before garnered money from the global market through bonds — a fiscal device that provides medium-level security to investors. Convertible bonds appeal to investors in unsteady markets, as they provide a fixed return with capital appreciation.

While the bond market might have been a new venture for Indian companies, consummate in the well-established wind-energy market in the country, India attracted $2.5 billion for asset finance, up almost four times from the $671 million it had picked up in 2006. As a consequence, the country's wind power capacity grew by 1.7 giga watt in 2007.

Suzlon might have hit a snag with its new exports this year but the potential of the market continues to expand. Venture capital funds and private equity placements hit $265 million, slightly higher than the $236 million that Indian companies had attracted in 2006.

While wind power seems to be drawing most of the investments into India, the role of solar energy is bound to scale up substantially with the National Action Plan on Climate Change promising a ramp-up during the 11th and 12th plans, in both power capacity as well as solar power equipment production.

This push might help India match the substantially higher investments China is attracting at the moment, though clubbed together, the troika of China, India and Brazil are continuing to pull money to the 'South'. Put together, their share of new investment has grown from a paltry 12% in 2004 ($1.8 billion) to 22% ($26 billion) in 2007, an expansion by 14 times in a mere three years.

But, the UNEP report gives a perspective to these figures that otherwise might look impressive. They indicate the creation of a new market which has now found trust in investors but is yet far from its potential. The $145.6 billion of global investment in new renewables in 2007 was merely 9.4% of the total global energy investment and Europe and US were still attracting most of it.

 
SOURCE : Times of India, Tuesday, 15 July 2008
 


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