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India to gain from US investment in South Asian energy fund

Business Standard:  November, 2010

Mumbai: The US Overseas Private Investment Corporation (OPIC) will provide $100 million in financing for the $300-million South Asia Energy Fund, part of the Global Environment Fund (GEF). The South Asia Energy Fund will invest in solar, wind, hydropower, advanced biofuels and natural gas projects, with focus on India.

In addition, GEF will form an India-specific sub-fund in association with the Infrastructure Development Finance Company and other potential Indian investors targeting India-only investment. This will be in addition to OPIC’s pipeline of more than $280 million clean energy and energy efficiency projects in India, said a statement from the White House.

US President Barack Obama’s visit has given a fillip to India’s plans of increasing its clean energy resources, mainly availability of increased funding for clean energy projects and products.

Prime among the areas of cooperation will be to launch a US-India Energy Cooperation Program, an innovative public-private partnership that will leverage business resources in both the US and India for commercial projects and pilot development initiatives in clean energy and efficiency.

The US President’s visit will also accelerate establishing a Joint Clean Energy Research and Development Center, that will mobilise up to $100 million in public and private sector funding over five years for R&D on potential breakthrough technologies. The centre is conceived as part of the US-India Partnership to Advance Clean Energy initiated two years ago to promote co-operation in clean energy solutions.

Besides, the Export-Import Bank will provide substantial financial support for the purchase of US goods and services to be used in the development of significant renewable energy and natural gas projects in India. On the first day of Obama’s visit to Mumbai, the Export-Import Bank and Anil Ambani’s Reliance Power had signed a memorandum of understanding on providing $5 billion in financial support to Reliance Power for the purchase of US goods and services, solar and wind) energy facilities.