International banks were competing to finance Indias ambitious target of 175-gigawatt solar and wind energy development by 2022, a top international banker has said. “There is a very hectic pace of financing in the renewable projects,” said James Cameron, the Singapore-based managing director at the Hong Kong and Shanghai Banking Corp (HSBC). Noting the governments ambitious target of completing 100-GW of solar and 75-GW of wind energy by 2022, he said: “Certainly, India is going to have more megawatt of renewable energy on the ground than anywhere else in Asia.” “Domestic banks are supporting these well-structured projects very strongly by offering competitive terms and pricing. And that is why we are looking at a lot of projects that are to be done,” said the HSBCs co-head of infrastructure and real estate group for Asia Pacific.
“We are seeing opportunities for both the domestic and international capital markets to play an increasing role in financing these projects, especially as they become operational or are heading towards completion,” said Cameron of the financing support following the domestic lenders. International financiers are also more comfortable with renewable projects by state-owned corporations and state governments with higher grade credit ratings, said Cameron who addressed the “Financing Energy Projects in Asia 2016” here earlier this week. But he also noted potential capital capacity freeze in the domestic markets, given the huge pressure on funding 175,000-MW projects.
According to industry estimate, each renewable megawatt would cost USD 1 million. “There are a wide range of international banks looking at the state utilities credit qualities,” said Cameron, a veteran in capital financing, global banking and market studies. The bidding process is more streamlined, he pointed out in reference to easier regulatory regimes and tariff offerings compared to Indias past regulation-bounded project implementations.