Germany to lend one billion Euro soft credit for green energy projects

Both the countries will sign the agreement today

Germany will lend India a soft loan of one billion euros to create infrastructure for green energy projects in the country.

The Union Ministry for New and Renewable Energy (MNRE) and Germany’s Ministry for Economic Co-operation will ink a deal in this regard on Thursday. The agreement will be part of a joint declaration on co-operation in the energy sector.

The deal will ensure evacuation of green power generated and transmission of the same.

Union Minister for Non-Conventional Energy Farookh Abdullah and German Minister for Economic Co-operation Gudrun Kops will sign the agreement, said Alok Srivastava, Joint Director, MNRE.

He was speaking to reporters on the sidelines of the Indo-US joint regional workshop on integrating renewable energy generation jointly organised by MNRE and Karnataka Renewable Energy Development Limited here on Wednesday.

Soft credit

Germany has agreed to pledge up to one billion euros as soft credit to set up green energy corridor. The funds will be routed through German Development Bank (Kreditanstalt für Wiederaufbau) and used in those areas where there are no grid to evacuate renewable energy, Srivastava said.

The funds will be utilised for green energy projects in States such as Karnataka, Andhra Pradesh, Gujarat, Maharashtra, Rajasthan, Jammu and Kashmir and Himachal Pradesh. Srivastava also said that to promote more entrepreneurs to take up green energy projects, the Ministry of Finance has decided to release money from the national green energy fund at lower rate of interest.

Wind energy

During the inaugural session of the workshop, Srivastava said the MNRE has proposed ‘generation-based incentive’ to promote wind energy and the proposal will be placed before the Cabinet for its approval.

M R Sreenivasamurthy, chairman, Karnataka Electricity Regulatory Commission, said the State has a capacity to generate 13,000 mw of renewable energy. Presently State contributes 14 per cent to the total renewable energy generated in the country and, it consumes about seven per cent of it.


Need of the hour
Stating that a policy to increase the use of renewable energy is need of the hour, Sreenivasamurthy said that the renewable energy being costly, the people cannot opt to buy power at Rs 15 per unit. However, he was optimistic that the costs would come down in the days to come.

Emphasising on variability management in the power sector, he said that the State should work on making use of hydel reserves only to meet peak hour demand.
“We have huge reservoirs exclusively for generating power, which should be used for generating power for peak hour load,” he remarked.