IFC to focus on renewable energy funding in India
International Finance Corporation, part of the World Bank group, has refocused its investment strategy for the power sector and will be investing in renewable energy and hydropower projects in India. To begin with, it has already made equity and debt investment in both wind and solar segments and is now looking at corporate debt finance.
“We do not finance coal projects any more. While natural gas is a difficult sector, solar and wind projects can be deployed rapidly to meet the government’s 24×7 power supply plan,” Gaetan Tiberghien, principal investment officer, infrastructure and natural resources, South Asia told Business Standard. Tiberghien pointed out that coal-based power generation projects take about three years to go onstream, hydropower can take seven or even more while wind projects can be done in a year and solar even less.
Though analysts have expressed concern on unrealistic tariff bids put up by solar power generators, Tiberghein said developers have been able to sustain because this coincided with rapid decrease in costs. “Bidders have been lucky since they have been able to take the benefit of fall in costs. Unlike the road sector where aggressive bids caused concern, there have been no cost overruns in solar. But going forward, it may not be so since costs in solar have stabilised and it could be risky to put in aggressive bids.”