India needs around $60 billion to achieve its 450 GW renewable target by 2030, according to Prateek Jhawar, Executive Director-Investment Banking & Head, Infrastructure and Real Assets, Avendus Capital Private Ltd.
The good news, however, is that there is no dearth of capital and India’s renewable story is finding favour with international investors who are ready to deploy large capital in the country.
“Renewable energy is the preferred investment segment for international investors from two perspectives: the overall mandate for these investors is turning towards sustainability, which renewable energy qualifies for and for the infrastructure investment asset class, the biggest quantum of requirement is coming from renewables. Other alternative sectors are not consuming as much capital at this point in time,” Jhawar told ET, adding that large corporates have started to realise this shift in mandate from investors.
“They will continue to feel pressure on the treasury and the cost of financing, which is pushing them to align themselves with the sustainability goals,” added Jhawar.
Over the past year, more than a dozen companies have vowed to transform their legacy businesses into sustainable, circular, and net-zero. These include petrochemical giants like RIL, metals and mining major like Vedanta, power major JSW Energy and banking bellwether HDFC among others.
At the COP26 meet in Glasgow, India set a target to cut its net carbon emissions to zero by 2070. The country ranks a lowly 120 among 165 countries in its progress towards achieving all 17 sustainable development goals, lower than SAARC counterparts Sri Lanka, Nepal and Bangladesh.
According to John Graham, president and chief executive officer of the Canada Pension Plan Investment Board (CPPIB), as the global economy moves towards carbon-neutral goals, it presents a “generational investment opportunity”. With total assets worth $500 billion in its kitty and $15.50 billion in India, CPPIB expects its net-zero transition assets portfolio to double by 2030.
“One of the key challenges that conventional energy sources are facing is that the newer money foresees exit issues in the future,” said an industry expert.
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The ‘Panchamrits’ are — India’s non-fossil fuel energy capacity will reach 500 gigawatts by 2030; meet 50 per cent of its energy requirements from renewable energy by 2030; reduce the total projected carbon emission by 1 billion tonnes till 2030; reduce the carbon intensity of its economy by 45 per cent by 2030 and achieve the net-zero target by 2070. Yadav, while reiterating the ‘Panchamrits’, said there is “no planet B”.
Speaking at an event here, Saraswat said, “Furthermore, India will also reduce the total projected carbon emissions by 1 billion tonnes from now onwards till 2030. By the year 2070, India will achieve the target of Net Zero“.