India

A joint venture involving ADB will develop and operate 500 megawatts of renewable energy projects in India in the next three years. The joint venture agreement was signed by the Asian Development Bank with India’s National Thermal Power Corporation and Japan’s Kyushu Electric Power Company. "The new joint venture company will help India achieve its goal of reducing the country's dependence on fossil fuels, will cut greenhouse gas emissions and improve its energy security," said Michael Barrow, Director in ADB's Private Sector Operations Department,  who signed the agreement in New Delhi. "We hope this company will also provide an example to other foreign investors looking at India's renewable energy sector." Under its National Action Plan on Climate Change, the Indian government has set a target of generating 15 per cent of its total power from renewable sources by 2020. Currently, renewable energy accounts for 10 per cent of total power capacity in India while 65 per cent comes from thermal power plants—mostly coal-fired—which generate the majority of the country's carbon emissions. The remainder of India's power comes from hydropower and nuclear power. "India now has the capacity to generate just over 11,000 megawatts of wind power, but, with the right investment, that could increase to almost 48,000 megawatts. At the same time, small hydropower has the potential to generate about 15,000 megawatts of power and, what's more, is often the best way of providing electricity to low-income households in remote areas," said Don Purka, Senior Investment Specialist with ADB's PSOD. NTPC, the largest power generating company in India with a 33 per cent market share, is majority owned by the Government of India but operates on a commercial basis as an independent company. It currently has a generating capacity of 32,694 megawatts but is working to increase that to 75,000 megawatts by 2017. Under the joint venture agreement, ADB will invest up to US$40 million for a 25 per cent stake in the company. The move is part of ADB's goal of investing $2 billion a year in renewable energy and energy efficiency projects in Asia and the Pacific to help put the region on a sustainable deve opment path. NTPC will have a 50 per cent holding in the company with Kyushu Electric Power owning the remaining 25 per cent.