While I was analysing, for one of our clients, the drivers and bottlenecks for wind power financing, I came across a fairly well made out white paper that discussed the framework for mobilising European investment in the Indian wind power sector. Though it was originally done in 2007, I thought it was a white paper worth reviewing for all those keen on understanding what could drive investments in this key renewable energy sector.
The following are the contents of the white paper
1. Introduction
1.1 Global Context
1.2 European Capital in the Indian Context
1.3 India: Opportunities and Challenges
1.4 Purpose of this Paper
1.5 Definition of Project Finance
1.6 Organisation
2. Incentives and Supports for Wind Investment
2.1 India
2.2 Europe
2.3 Summary
3. Factors Impacting European Investment in the Indian Wind Sector
3.1 Positives for Investment
3.2 Challenges Confronting Foreign Investment
3.3 Striking a Balance
4. Sources of Funds
4.1 Investor Models
4.2 Investment Structures
4.3 Debt
4.4 Equity
4.5 Mezzanine Capital
4.6 Insurance
5. Uses of Funds
5.1 Greenfield Investments
5.2 Acquiring Existing Assets and Repowering
5.3 Investing in Manufacturing and Services
5.4 Grid Financing
6. Cost of Capital and Return on Investment – the key challenge to
mobilising EU-based funds
6.1 Weighted Average Cost of Capital for a Project in India
6.2 Cost of Project Debt
6.3 Cost of Project Equity
6.4 Expected Project Returns6.5 Stage of Investment
7. Risk Assessment from the European Investor Perspective
7.1 Credit Risk
7.2 Political Risk
7.3 Exchange Rate Risk
7.4 Technical Risk – Turbines
7.5 Technical Risk – Grid Operations
7.6 Fundamental Sustainability Risks
7.7 Conclusions
8. Ways to Enhance Wind Project Economics
8.1 The Need to Create ‘To-scale’ Investments
8.2 Wind Farms and SEZs
8.3 Role of CERs and RPS Rights
8.4 Corporate Finance Options
8.5 Conclusions
9. Conclusions: Implications for Mobilising European Investment in the
Indian Wind Sector
The complete white paper can be read from here
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