Climate Policy Initiative and the Indian School of Business release findings from
two studies on renewable energy financing in India
Dec. 5, 2012
/PRNewswire-USNewswire/ -- Climate Policy Initiative (CPI) and the Centre for Emerging Markets Solutions (CEMS) at the
Indian School of Business
(ISB) have found that high interest rates and relatively short term loans for renewable energy projects in
add 24-32% to the cost of renewable energy in
compared to similar projects in the U.S. and
. The national government has a goal to reach 4,000-10,000 MW of renewable energy by 2017 and 20,000 MW by 2022. Debt market issues make it more expensive for
to meet these goals.
The CPI-ISB Energy and Environment Program report, "
Meeting India's Renewable Energy Targets: The Financing Challenge
," finds that even if the cost of debt goes down, issues with loan terms, access to low-cost equity, limits on foreign debt, and national banking practices are likely to present additional barriers for growth in
's renewable energy sector in the medium and long term.
launched Renewable Energy Credits, a market-based national policy, to help the country reach its renewable energy targets more efficiently. The CPI-ISB report,
Falling Short: An Evaluation of the Indian Renewable Certificate Market
," finds that the Indian Renewable Energy Certificate market is not likely to achieve government objectives. Though the design of the Renewable Energy Certificate mechanism appears adequate, the performance of the market has been far from satisfactory.
"High debt costs, common in emerging economies, are a potential barrier to the growth of renewable energy," said
, Senior Director, CPI. "CPI is now analyzing how other nations have addressed this issue.
's national development bank has provided low-cost debt to spur these projects forward, and may provide some helpful lessons for
has more than enough wind and solar potential to meet the country's ambitious targets," said
, Executive Director, CEMS, ISB. "But without policy solutions,
's financing challenges will force this sector to fall behind."
The CPI-ISB Energy and Environment Program
Climate Policy Initiative and CEMS completed these first two research publications on
under the "CPI-ISB Energy and Environment Program," a new partnership to analyze the effectiveness of energy and climate policies in
. The program conducts analysis and provides information and advice that can help advance the country on a path towards clean development.
"While most policy analysis organizations in
focus on the technical aspects of policy design, this program focuses on the impact of policy on business actions, in-depth review of the political economy, and comprehensive analysis of policies across sectors," said
, Executive Director, CEMS, ISB. "These first projects look squarely at the real-world problem of financing renewable energy."
About Climate Policy Initiative
Climate Policy Initiative (CPI) is a global policy effectiveness analysis and advisory organization. Its mission is to assess, diagnose, and support nations' efforts to achieve low-carbon growth. An independent, not-for-profit organization with long-term support from
, CPI's headquarters is in
and regional offices are in
Rio de Janeiro
About the Indian School of Business
Indian School of Business
(ISB) was established in 2001 with an aspiration to put
on the global map of management education. In less than a decade since its inception, the ISB has successfully pioneered several new trends in management education in
, and firmly established itself as a world-class management institution. In 2008, the ISB became the youngest institution to be ranked among the Top 20, in the Global B-school Rankings by the Financial Times,
, and since then has been ranked consistently among the top B-schools globally. The ISB today has a strong pool of research-oriented resident faculty and invites high caliber international faculty from reputed B-schools to teach in its Post Graduate Programme in Management (PGP), Post Graduate Programme in Management for Senior Executives (PGPMAX), and Executive Education Programmes. In addition to teaching, the visiting faculty also participates in collaborative research with the resident faculty. The school has over 4000 PGP Alumni and 13,000 Executive Education Alumni making an impact on business and society across the world.
SOURCE Climate Policy Initiative