India Approves Renewable Energy MoUs with France & Mongolia
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The Indian government has given its final approval to memoranda of understanding on cooperation in the renewable energy sector with France and Mongolia signed earlier this year.
The agreements were signed by the countries involved during Prime Minister Modi’s visit to the respective countries. The agreement with France will have significant consequence in the development of renewable energy infrastructure in India.
While the agreement calls for technical cooperation on an institutional level which may include sharing of expertise between universities and technical institutes, India would like to get access to the much needed financial aid for achieving its ambitious renewable energy targets.
Agence Française de Développement (AFD) has already pledged a credit line of €1 billion for the next 3 years for the development of clean energy projects in India. The Indian government is believed to have approached several international development banks to raise low-cost debt to finance for setting up renewable energy projects; AFD may thus increase its financial commitment to India.
During Prime Minister Modi’s visit to the France it was also announced that French companies are looking to develop 8-10 GW of renewable energy capacity in India over the next few years. Several French companies are active in the Indian solar power market. These include Solairedirect SA, which was among the first companies to set up solar power projects under the National Solar Mission. The renewable energy arm of French state-run utility Electricite De France SA (EDF), EDF Energies Nouvelles (EDF EN), has stake in another pioneering solar power developer in India – ACME Cleantech Solutions. ACME plans to set up 7.5 GW solar power capacity in India over the next 5-7 years.
The memorandum of understanding with Mongolia is aimed at encouraging technical cooperation in the renewable energy sector. However, the agreement seems more of a strategic gameplay in ‘China’s backyard’ and is unlikely to help India achieve its own renewable energy targets. The knowledge exchange, however, may eventually help Mongolia develop a strong renewable energy infrastructure as it has significant wind as well as solar energy resources.
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