With banks and private equity investors looking at clean energy projects as a viable business proposition, finding finance for green energy projects is set to become easier.
?There are many investors who are keen on getting into the clean energy segment and if a proposition is viable,?finance will obviously follow,? said Stuart A Davis, CEO of HSBC.
In the panel discussion that followed the Green Business Leaders Award function on Saturday, several participants pointed out that carbon trading begins to generate money only after the project is completed and with out commitments from banks from the beginning, it becomes difficult to finish these projects. In the role of advisors, investors and insurers, banks are uniquely positioned to support individual companies and projects that promote sustainable development.
?Banks can not only reduce their stand alone emissions, but can also channelise investments in low-carbon projects and impede investments in carbon-intensive ones,? a survey released on Saturday by The Financial Express and Emerging Ventures India pointed out.
Representatives of various banks present at the function assured adequate funding for clean energy projects.
HSBC Bank, ICICI and HDFC Bank, the entities who received green leaders award in the banking industry, are not only is keen on investing in green energy projects but also leads the way in cutting the their own carbon emissions through unique initiatives.
Country?s ?largest private sector lender ICICI Bank said they have been a part of clean development for years and will continue providing financial support to the project.
?We already provide a 50% processing fee waiver for loans on green vehicles and green homes and will be coming out with many new initiatives to further for the cause of clean energy,? said Sachin Khandelwal, senior general manager at ICICI Bank.
Clean and renewable energy projects ensure huge returns because of the predictable long-term cash flow guaranteed by an increasing focus by governments globally.
?Indian government will focus more on the renewable energy segment in the coming years and corporates investing in this sector should make sure that they are using the best technology available to remain cost effective over the long term,? said minister for renewable energy Farooq Abdullah.
Climate change offers an opportunity for banks to diversify their investment and retail product lines. Clients? interest in climate risk management, carbon markets and socially responsible investing is on the rise, representatives from various banks pointed out.
Banks like State Bank of India and YES Bank are generating additional business income through carbon credit financing and advisory services.