India to seek 15% of $50 billion for renewables from overseas

India may seek at least $7.5 billion of the $50 billion it’s planning to invest in clean energy in five years from foreign direct investment, a government official said.

“We’d like a bare minimum of 15 percent of that coming as FDI over the next five years,” Gireesh Pradhan, secretary at the Ministry of New and Renewable Energy, said today in an interview in London.

Prime Minister Manmohan Singh plans to spend more than $300 billion in the five years to March 2017 to expand India’s electricity systems in an attempt to spur 9 percent economic growth by then. An increasing share of that may be allocated to renewable projects as lenders shun new conventional power projects that face rising fuel costs.

India would like to “get the maximum that one can get” from overseas investors, Farooq Abdullah, minister for new and renewable energy, said in the same interview. He said he was assuring investors of concerns about whether policies and tax structures for renewable energy projects will remain.

“We feel that renewable energy is the future, not only of India but also the world,” Abdullah said. “Fossil fuels are gradually disappearing and the environmental damage that has been done by them has been of an immense nature.”

Vineet Mittal, managing director of Welspun Energy, India’s largest solar photovoltaic developer, is planning to add 1 gigawatt of wind and 750 megawatts of solar over the next three to four years, he said in an interview in London.

India outpaced the rest of the world in investment in clean energy in 2011 due to improving cost competitiveness of wind and solar projects, according to Bloomberg New Energy Finance. India’s clean energy investments were $10.3 billion last year compared with $6.8 billion invested in 2010, the highest growth figure of any significant world economy, according to the London-based industry analyst.

“Serious players are coming in and looking at renewables in a serious way,” Pradhan said.

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