The ministry of environment and forests (MoEF) has selected four sectors in the country to seek funding from the World Bank and Asian Development Bank supported Clean Technology Fund (CTF) to complement the ongoing National Action Plan on Climate Change (NAPCC) and the low carbon growth path.
The ministry has sought funding for spurring hydro power in Himachal Pradesh, support the National Mission for Enhanced Energy Efficiency (NMEEE), partial risk guarantee for energy efficiency technologies and support to the Jawaharlal Nehru National Solar Mission (JNNSM).
?The government proposes to obtain initial financing from the CTF to support a set of projects and initiatives that have been identified for their critical impact on social and economic development with significant co-benefits for climate change,? according to the ministry?s policy document on CTF funding.
To give a fillip to the hydro power in Himachal Pradesh, the ministry wants to increase its potential from the current 31% to 70% in the next 10 years. For the NMEEE, the CTF would provide concessional financing to support its specific programmes like the support to the Perform, Achieve and Trade scheme, which is a market-based mechanism to enhance cost effectiveness of improvements in energy efficiency in energy-intensive large industries through certification of energy savings that could be traded.
On the other hand, for the proposed Partial Risk Guarantee (PRG) mechanism, the MoEF is looking at specified technology and associated commercial risks for new technologies in energy efficiency that are not usually priced by commercial banks.
As for solar power, the government claims that despite early success in the competitive bidding, tariffs for solar power are still nearly two to three times that of conventional power and the CTF funding to JNNSM would scale up research, development, and deployment to drive down costs and help solar energy achieve tariff parity with conventional power.
For this, the government?s Climate Investment Plan is presented in two phases. While phase one projects will be appraised in less than a year from now, phase two consists of projects that are under preparation and likely to be appraised within two years from now. The notional CTF allocation for phase one is $750 million.