India Policy Support Draws Investors in Renewables, Avaada Says
India’s policy support for renewable power is helping attract foreign capital, according to Avaada Chairman Vineet Mittal.
(Bloomberg) -- India’s policy support for renewable power is helping attract foreign capital, according to Avaada Energy Pvt. Chairman Vineet Mittal, aiding the nation’s plans for record wind and solar power generation.
The South Asian nation is counting on overseas investment for a more than four-fold expansion in its renewable power capacity over the next decade, as the world’s third biggest emitter of greenhouse gases plans to shift away from fossil fuels, which have long been the mainstay of its economy.
Among the latest to bet on the Indian renewables market is Thailand’s Global Power Synergy Pcl, which invested about $452 million to buy new shares worth an almost 42% stake in Avaada Energy last month.
“We have a strategic investor that’s not looking at dividends coming out of this business,” Mittal said in an interview to Bloomberg Television. “They also believe in the India story like we do. So we can continue to grow through internal accruals.”
The government’s policies give renewable power generation projects a “must-run” status, which deters buyers from curtailing purchases and insulates the projects from sharp drops in electricity demand. The federal government’s steps to ensure timely payments to project developers have also added to investors’ confidence, Mittal said.
New Delhi-based Avaada has about 1.7 gigawatts of operational assets and plans to add another 2 gigawatts over the next six to seven months, Mittal said, adding that the company is fully funded for the next three years. It plans to build 11 gigawatts of capacity by 2025, according to its website.
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