Wind power industry seeks easier access to credit

The wind power sector has asked the government to make available more loans for industry players as they are now standing “last in the queue for credit”. This is one of the issues the recently-launched National Wind Energy Mission will attempt to resolve, say industry representatives.

The industry has already mooted the creation of a Rs 25,000-crore fund, which could perhaps be managed by the government-owned Indian Renewable Energy Development Agency Ltd (IREDA). Once set up, loans could be rolled out from this fund. “Today, wind companies stand last in the queue for credit,” says Ramesh Kymal, a doyen of the wind industry in India and the Chairman of the Indian Wind Turbine Manufacturers Association (IWTMA).

The industry is not asking for any subsidised interest rates, but for more loan for the same amount of equity capital (or, “higher leverage”) with longer repayment periods, say 10-15 years. The IWTMA, along with the Wind Independent Power Producers Association and the Shakti Sustainable Energy Foundation, made a presentation at a meeting of industry stakeholders held in Delhi on January 9. Kymal said the specific recommendation for the creation of the fund will be considered by the government.

The manufacturing side of the industry is capable of producing machines worth 10,000 MW, but the market is for less than 2,000 MW. In 2012-13, wind power installations fell to 1,700 MW from 3,200 MW in the previous year because the government withdrew two incentives – the generation-based incentive (GBI) and tax-saving accelerated depreciation benefit. Compounding matters was the promise of the restoration of the GBI, which caused project developers to wait for it. This took time and the GBI was brought back. Wind farm projects were held back, while those investors who would have put up wind turbines for the ‘accelerated benefit’ depreciation, began looking at ‘solar’ as an alternative. 

Due to this confusion and the anaemic economy, wind power installation in the current financial year, too, is  ot expected to exceed the previous year’s achievement of 1,700 MW by any significant margin.

However, industry insiders feel the launch of a National Mission will help bring focus on the industry.

Source Business line