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REC, PFC to step up clean energy funding: Piyush Goyal

State-owned financial institutions Rural Electrification Corp. (REC) and Power Finance Corp. (PFC) will offer loans specially designed for renewable energy projects as they seek to help the sector meet its massive financing requirements, minister for power, coal, mines and renewable energy Piyush Goyal said.Goyal told reporters that the government was also planning to set up a dedicated fund for making equity investments in renewable projects, but was waiting for interest rates to soften a bit more.“We are waiting for some interest rate correction. That will help right-size investors’ expectations on return on equity,” the minister said.

According to official estimates, India requires about $140-160 billion of investments to take renewable energy generation capacity of 34 GW reported in February 2015 to 175 GW by 2022. The country had managed to raise it to 43 GW by last month.The government, committed to reducing carbon emissions by 30-35% and to increase the share of renewables to 40% of the energy mix by 2030, is seeking to raise the availability of funding for the sector.It got a commitment on 30 June from visiting World Bank Group president Jim Yong Kim for $1billion of loans to renewable energy projects.

The minister also preferred inclusion of the electricity sector in the proposed goods and services tax (GST) regime.