Wind power can attract Rs 1 lakh crore investments by 2020: Crisil

Credit rating agency Crisil believes that the impressive five-fold increase in wind power energy over the last ten years, coupled with the government's favourable policy towards renewable energy, can potentially attract investments up to Rs 1 lakh crore by 2020.

In a release issued to the media, Pawan Agrawal, Chief Analytical Officer, Crisil Ratings, said, "Grid parity, along with the recently restored fiscal benefits, make wind power projects profitable, sustainable, and scalable. As a result, Crisil expects wind-power capacity to nearly double from current levels - growing at 4,000 MW per annum - in the next five years. That translates into an investment potential of Rs 1 lakh crore."

The release added that in the last five years, nearly 60 per cent of the capacity added was by private developers. And the top ten developers, with a 20 per cent share of capacity, have invested about Rs 12,000 crore as equity. "The sector's rising attractiveness has also been accompanied by a change in the lending approach from sponsor support seen earlier to one based on project cash flows," the release said.

In a conversation with Business Today, Agrawal, however, did point out that generating 4,000 MW of wind power per annum-in the next five years-is subject to the usual challenges related to project implementation. This includes land acquisition at appropriate locations, along with a strong and robust infrastructure. "Wind mill projects are often established at remote locations due to wind patterns, so there needs to be a proper infrastructure in place to ensure the evacuation (transfer) of power," he said, adding that along with project implementation, raising capital -both equity and debt-will also pose a challenge.