Investment in India

Investment options in Indian energy sector

Energy plays a key factor in determining the economic development of all countries. The Indian energy sector has witnessed a rapid growth in order to meet the demands of a developing nation. Areas like resource exploration and exploitation, capacity additions, and energy sector reforms have been revolutionized.

Energy sector in India comprises of both non-renewable (coal, lignite, petroleum and natural gas) and renewable energy sources (wind, solar, small hydro, biomass, cogeneration bagasse etc.).

India has retained its position in top five world wind energy markets in 2012. The country remained the third largest market for new turbines in 2012 with capacity addition of 2,441 megawatt (MW), according to World Wind Energy Report 2012. World's wind turbine capacity addition grew at 19 per cent to 44,609 MW.

Major investments in Indian energy sector

The investment climate is very positive for investors in India. The power sector has witnessed a surge of higher investment flows than envisaged. The Ministry of Power has set a target for adding 76,000 MW of electricity capacity in the 12th Plan (2012-17) and 93,000 MW in the 13th Plan (2017-22).

Some of the major investments in the Indian energy sector:

• National Aluminium Company Ltd (Nalco) has set up its second wind power plant in Jaisalmer district of Rajasthan with a capacity of 47.6 MW. The Rs 283 crore wind power project is being executed through Gamesa Wind Turbines Private Ltd
• Coal India Ltd (CIL) plans to invest Rs 340 crore to embark on the second round of exploration at Mozambique coal blocks
• Jakson Power Solutions has won two new orders for installing solar rooftop systems in Bengaluru and Pune. The first order is to set up the 80 kilowatt peak (KWp) solar rooftop unit with a facility of battery back-up at Karnataka State Disaster Management Centre, Bengaluru, said Mr Sundeep Gupta, Joint Managing Director, Jakson Power Solutions
• Vikram Solar plans to put up a 10 MW power plant at Tamil Nadu (TN) under the second phase of the state's solar policy
• Mytrah Energy Ltd plans to acquire 59.75 MW of existing operational wind power assets in Tamil Nadu (TN) and Maharashtra. The company expects to have a capacity of 370 MW against previously anticipated 334 MW by 2013 wind season

Government Initiatives to promote investments in the energy sector

The Government has initiated several policies to attract investors in India to invest in the Indian energy sector. To accelerate capacity addition, several policy initiatives have been undertaken by the Ministry of Power. The National Electricity Policy (NEP) in fact, stipulates power for all and annual per capita consumption of electricity to rise to 1,000 units by 2012.

Some of the major investments taken by the Government of India to garner investments in the energy sector are as follows:

• Foreign direct investments (FDI) up to 100 per cent is permitted under automatic route for projects of electricity generation (except atomic energy), transmission, distribution and power trading
• Under the Union Budget 2013-14, the Government of India has approved a scheme for the financial restructuring of DISCOMS to restore the health of the energy sector in India
• In a boost to power firms with plans to set up units in Special Economic Zones (SEZ), the Government has exempted them from the positive net foreign exchange (NFE) obligation applicable to regular units in such enclaves

Investment opportunities in energy and telecommunication sector of India

The Government of India has accepted Telecom Regualtory Authority of India’s (TRAI) recommendations on ‘Approach towards Green Telecommunication’ and has decided to promote the use of green energy in the telecommunication sector setting broad directions and goals to achieve desired reduction in carbon emission through use of renewable energy technologies and energy efficient equipment. Department of Telecommunications has issued directions to the licensees for implementation with immediate effect. These directions stipulate inter-alia that at least 50 per cent of all rural telecom towers and 20 per cent of the urban towers are to be powered by hybrid power (renewable energy technologies and grid power) by 2015 while 75 per cent of rural towers and 33 per cent of urban towers are to be powered by such systems by 2020.

Telecommunication sector of India

Telecommunication in India is the second-largest in the world with 951.3 million subscribers as of March 2012. India is expected to feature among the top 10 broadband markets by 2013.

In terms of subscriber base, Bharti Airtel made the lead in the month of July 2012 with 188.8 million subscribers followed by Vodafone with 154.9 million. Idea Cellular added 455, 912 subscribers to have 117.6 users and State-run Bharat Sanchar Nigam Ltd (BSNL) added 471,552 users to have 98.75 million subscribers. Tata Teleservices has a total number of 77.8 million subscribers, while Uninor has 44.5 million.

Since the introduction of the New Telecom Policy in 1999, telecommunication in India has witnessed huge investment opportunities, especially in the wireless segment. The industry has evolved as a basic infrastructure on the similar lines of electricity, roads, water etc.

The Government of India is also focussing on improving rural tele-density and broadband connectivity, effective expansion of the networks with efficient utilisation of scarce spectrum and ensuring equal sharing of highly capital intensive infrastructure.

Indian Energy Sector

The Indian energy sector is one of the most diversified sectors in the world. Energy in India is generated from commercial sources like coal, lignite, natural gas, oil, hydro and nuclear power as well as other viable non-conventional sources like wind, solar and agriculture and domestic waste. Energy sector in India has been growing at a rapid rate and is expected to increase further in the years to come. In order to meet the increasing requirement of electricity, massive addition to the installed generating capacity in the country is required.

India has been one of the top performing clean energy economies in the 21st century, registering the fifth highest five-year rate of investment growth and eighth highest in installed renewable energy capacity, according to a research report released by The Pew Charitable Trusts.

The investment climate is very positive in the Indian energy sector. Due to the surge in the sector, it has witnessed higher investment flows than envisaged. The Ministry of Power has sent its proposal for addition of 76,000 MW of power capacity in the Twelfth Five Year plan (2012-2017) to the planning commission. The ministry has set a target for adding 93,000 MW in the Thirteenth FiveYear Plan (2017-2022).

The Government has initiated several policies for energy sector in India to promote and garner investments from NRIs/PIOs. To accelerate capacity addition, several policy initiatives have been undertaken by the Ministry of Power.

Invest in the lucrative Energy Sector of India

The energy sector in India is one of the most diversified fields in the world. Sources for power generation range from commercial sources like coal, lignite, natural gas, oil, hydro and nuclear power to other viable non-conventional sources like wind, solar and agriculture and domestic waste. The demand for electricity in the country has been growing at a rapid rate and is expected to augment further in the years to come. In order to meet the increasing requirement of electricity, massive addition to the installed generating capacity in the country is required.

Renewable energy is the new keyword in Indian energy sector and most of the public and private players are coming up with plans to tap the potential market, on the back of favourable Government policies and initiatives. To tap the underlying potential, various Indian States are focussing on those aspects of energy, in which they have an edge, such as solar power, wind power, hydro power etc.

India has been one of the top performing clean energy economies in the 21st century, registering the fifth highest five-year rate of investment growth and eighth highest in installed renewable energy capacity, according to a research report released by The Pew Charitable Trusts.

Investment Opportunities in Indian Energy Sector

The investment climate is very positive in the power sector. The sector has witnessed higher investment flows than envisaged and offer huge investment opportunities for non-resident Indians (NRIs)/person of Indian origin (PIOs). The Ministry of Power is believed to have sent its proposal for addition of 76,000 megawatt (MW) of power capacity in the Twelfth Five Year plan (2012-17) to the Planning Commission. Energy sector in India is expected to generate revenue of about Rs 13 lakh crore (US$ 246.27 billion) during the Twelfth Five Year plan, according to Shri P Uma Shankar, Union Power Secretary. He said that the Government is looking at revenue estimates of Rs 2.5 lakh crore (US$ 47.36 billion) from transmission and Rs 4 lakh crore (US$ 75.78 billion) from distribution, in addition to Rs 6.5 lakh crore (US$ 123.15 billion) from generation.

The Government has initiated several policies to promote and garner investments from NRIs/PIOs in the power sector. To accelerate capacity addition, several policy initiatives have been undertaken by the Ministry of Power. The National Electricity Policy (NEP) in fact, stipulates power for all and annual per capita consumption of electricity to rise to 1,000 units by 2012. Foreign direct investment (FDI) up to 100 per cent is permitted under automatic route for projects of electricity generation (except atomic energy), transmission, distribution and power trading.

The power sector in India is witnessing a growth trajectory. The Government has taken several steps required to provide investment opportunities and to develop power sector infrastructure within a short span of time. In fact, the State Electricity Board is going to renovate all the current power plants with the help of private partners.