Governmental Regulations:

India is becoming more active today with an emphasis on implementation of regulations. With a more active media and awareness of people towards environment, India is driven towards adopting a pro-environment stance in all its development strategies.

Depletion of Natural Resources:

With coal reserves depleting or more available in dense forest locations where current environmental laws forbid mining, and with the depleting availability of water for man’s use, there is immense pressure on natural resources as the human population and urbanisation increases. There is an urgent need to protect the available resources.

Adopting Newer & Cleaner Technologies:

The adoption of newer and cleaner technologies will help India in leapfrogging into the sustainable growth pathway as the Indian economy grows at an unprecedented rate.

Man-Environment Conflict:

There is an increasing importance given to the voice of the local communities that reside on or near the natural resources. The development of industry in these regions has led to conflict between the need for development to meet the power, water and other needs of a growing urban population, versus the need to protect the environmental resources that rightfully belong to these local communities.

Strong Economic Growth:

The Indian economy is growing strongly at 4-5 per cent plus annually and is one of the fastest growing economies in the developing world today.

Global Climate Negotiations:

The current global negotiations on climate change have put pressure on rapidly developing economies like India to adopt green technologies and not repeat the unsustainable mistakes of the past.

Overview and Administration Setup

 

 

Financing framework for Cleantech in India

Cleantech is an emerging area in India and as such the focus has been sector-specific. For e.g., there are separate programmes and schemes targeted at individual sectors such as solar, wind, energy efficiency, etc. Each of the sectors are under the overall administrative jurisdiction of separate ministries at the central government level and their corresponding departments at the state government level. As a result there is no single unified financing mechanism for cleantech. The financing available under such schemes and programmes varies from support for technology development to capital subsidy for commercialising and roll-out of projects. The funding options available in each sector have been addressing the respective sections. This section will present a broad overview of the range of institutions involved across various stages of the value chain.

Developing and commercialising clean technologies in India can be divided into two phases for the purposes of discussing the financing options. The first phase covers technology innovation, R&D, concept demonstration, pre-commercialisation and commercialisation. For this first phase, grants and subsidies can be applied for from various sources. As the company approaches actual commercialisation, loans are usually required. In the second phase, the roll-out or the post commercialisation stage when goods or services are produced, equity investments, loans and insurances are often required. This type of financing is usually provided by commercial and international financial institutions. Other potential funding sources for this stage include venture capital and private equity.

Source: Cleantech Handbook India, https://www.tem.fi/files/38574/Cleantech_Handbook_13_Jan_2014.pdf