Japan to fund pvt sector RE projects
1 min read . Updated: 17 May 2023, 11:28 PM IST
PremiumIn major critical projects, there have been long pending challenges in land acquisition or all sorts of clearances to be done by government authorities but fortunately when it comes to bullet train, the Ahmedabad Mumbai bullet train, things are going smooth with much support from government of India, state governments and strong leadership by National High Speed Rail Corporation.
New Delhi: Japan is looking at financing private sector renewable energy projects in India, the India head of the country’s development agency said in an interview. Saito Mitsunori, chief representative in India of JICA, or Japan International Cooperation Agency, said in an interview that so far the agency has provided lines of credit to state-run Indian Renewable Energy Development Agency Ltd (IREDA) and India Infrastructure Finance Company Ltd (IIFCL) for renewable energy capacity of 8 GW. Now, with a strong focus on renewable energy in the country, the agency plans to finance projects in the private sector as well. Mitsunori also said that JICA recently signed an MoU for developing four railways stations along the Mumbai-Ahmedabad bullet train route. These are Sabarmati and Surat in Gujarat, and Virar and Thane in Maharashtra.
Edited excerpts:
How was the last financial year for JICA in terms of disbursals in India?
In the last fiscal year, 2022-2023, we were able to make new commitments totalling nearly around $6 billion, which is a record high. When we look back, during the past decade our average annual commitment was $3-4 billion. Thanks to the progress of Mumbai-Ahmedabad high speed rail, we were able to make additional financial commitment to that project and to other new projects and ongoing projects combined, we came up with $6 billion of commitment.
We signed 7 projects in total last year. There are a couple of parameters to assess our work. While making commitments we need to get go-ahead (approval) for the projects and actual work needs to be done. We did disbursements of $5 billion in last fiscal.
Will JICA increase its presence in the green energy space?
We do have a lot of projects to increase renewable energy generation capacity. We have kind of a line of credit to IREDA and IIFCL.
Over the years, our total contribution in terms of renewable generation capacity is around 8 GW. We are in active discussion with our frequent customers to have more credit lines to enhance their capacity. On the other hand, the increase in renewable capacity brings more fluctuation and instability of the grid. So, stabilization of a transmission and distribution network is also another important pillar of the whole thing. So, we are working with various state transmission companies to increase transmission capacities. We are in talks with Tamil Nadu, Odisha and Haryana and we are ready to take up more states. We also have communication with Gujarat and Rajasthan.
We have sovereign landing schemes, but also we have private lending window. We are ready to mobilize that window to support private players in the sector.
Though we don’t have much track record in the past, we are in talks with various players, but the talks are in the initial stage. We do not have direct financing of a project at this moment, but we are always looking to...When we talk about renewable energy, generation and grid stabilization are two important pillars. In terms of stabilization we also have another activity which is promotion of pumped storage. Currently, we have one ongoing project in West Bengal, with almost 1 GW capacity.
In the case of the bullet train project we have seen issues in terms of physical progress. What is the status of the project?
In major critical projects, there have been long pending challenges in land acquisition or all sorts of clearances to be done by government authorities but fortunately when it comes to bullet train, the Ahmedabad Mumbai bullet train, things are going smooth with much support from government of India, state governments and strong leadership by National High Speed Rail Corporation. In the case of bullet trains, civil work is in full speed in Gujarat and post the regime change in Maharashtra things started moving ahead. Regulatory clearance and approvals were made by state authorities. So, now all civil work packages have been put to tender and some of them are almost at the final stages before awarding.
Which are the other key areas you would focus on going ahead?
In terms of financial volumes metro projects are always top of the list. Currently we are financing six metro projects, Delhi, Mumbai, Kolkata, Ahmedabad, Bengaluru a and Chennai. Now, different category of cities have come on the list, which is Patna, which is a tier two city. In March we were able to sign an agreement with four corporations, to partially fund metro rail projects in the city. JICA is keen to do more in this area, not only in urban transport but for water supply and sanitation. And also when you talk about urban infrastructure, a new dimension is kind of impact of climate change. Lots of floods are happening in many cities. So, flood protection, or drainage kind of infrastructure...We are supporting the planning urban flood protection in Tamil Nadu, Chennai. We working with municipalities and state authorities to come up with infrastructure investment in Chennai. This kind of things needs to be done everywhere, so, we are take up such projects in more states and more cities.
India and Japan have been looking at cooperation in projects globally, largely in Afrcia. Is there any movement on that front?
We know that there are very positive dialogue between the two governments. As far as JICA is concerned, we are not yet substantially involved in that process. So, we don’t have any particular projects or ideas, but, JICA is most active in India, India is our largest partner. We are also active in Africa, in many countries including Sudan. We could consider joint initiatives to support African countries in terms of infrastructure and various areas. We have some idea of a joint initiative in the forestry sector. That’s not going to be a massive financial support, but JICA and India’s forest departments have a long history together. Currently, we have eight or nine ongoing projects in India, where we support not only forestation activity but to support livelihood of the people depending on forest products. It is called joint forestry management. We are discussing with the government to transfer or share India’s experience in the forestry sector to African countries.