India and Green Investing
The concept is new in India.
The Government is planning to set up a green investment bank to support renewable energy-based power plants. This bank will be powered by the coal tax that the government introduced in 2010.
- In the Budget 2010, the Indian finance minister unveiled a $1 per ton tax on coal mined domestically or imported into the country.
The finance ministry expects to collect 5,000 Crore (about $1.1 billion) this fiscal year. This fund would be used for providing financial incentives to the project developers who wish to set up power plants based on renewable energy. The Indian government has announced several financial aid packages to spur investment in the renewable energy sector. Subsidies are being offered at various stages of the project execution.
There is huge demand for clean energy investments in our country, but there is no single entity to provide easy financing options to the project proponents. At present, financial support for the renewable energy power plants is provided by the Indian Renewable Energy Development Agency (IREDA) which has access to tax-free bonds worth $55 million and loans from banks through direct collaborations. The new entity would either originate from IREDA or would complement it.