Month in a Minute: Top Headlines from Indian Renewable Sector in January 2024

Solar industry secures decade-high corporate funding of $34.3 billion in 2023


Global corporate funding in the solar sector in 2023, including venture capital (VC) investments, public market funding, and debt financing, reached $34.3 billion, a 42% year-over-year (YoY) increase from $24.1 billion. This was the largest amount raised in over a decade. The numbers were revealed in Mercom Capital Group’s newly released Annual and Q4 2023 Solar Funding and M&A Report. While the total funding rose, the number of deals dropped 8.5% from 175 to 160.

Solar auctions during the calendar year 2023 witnessed an 82% YoY growth, with 22.2 GW projects auctioned, according to Mercom India Research. Falling module prices, streamlined balance of system (BoS) and modules’ supply, and stable BoS prices drove the auction activity in 2023. Solar tender activity in 2023 surged by 50% YoY, with multiple entities announcing tenders totaling over 57 GW.

The Ministry of New and Renewable Energy (MNRE) issued two clarifications on the guidelines for implementing the Pradhan Mantri Kisan Urja Suraksha evam Utthaan Mahabhiyan (PM-KUSUM) program for feeder-level solarization (FLS). In the first clarification, the Ministry confirmed that the waiver of the domestic content requirement for solar cells used for FLS under Component C of the PM-KUSUM program will stay in place until March 31, 2024.

Global venture capital funding in the energy storage sector in 2023 reached $9.2 billion, a 59% YoY increase from $5.8 billion. The amount raised was the largest ever. The numbers were revealed in Mercom Capital Group’s newly released Annual and Q4 2023 Funding and M&A Report for Storage & Grid. While the total funding rose, the number of deals dropped to 86 from 96.

Switzerland-based responsAbility, an impact-investment firm with over $4.7 billion in assets under management, said it would invest up to $25 million in BluSmart, an electric vehicle (EV) ride-hailing service in India. The investment, part of responsAbility’s broader $500 million climate strategy aimed at reducing carbon emissions in Asia through investments in low-emission technologies, will help BluSmart expand its EV charging infrastructure to enable large-scale adoption of electric mobility.

The MNRE expanded the Approved List of Models and Manufacturers (ALMM) by adding 64 MW of new solar module capacity. The cumulative module manufacturing capacity now stands at 22,191 MW. With the latest addition, the ALMM now has 72 module manufacturers. Nearly half, or 39 companies, have enlisted module capacities of 500 Wp and above. Even after the latest update, the ALMM has no foreign manufacturers.

China’s cumulative installed power capacity reached approximately 2.92 TW, a YoY increase of 13.9%, with solar power accounting for 609.49 GW, a YoY 55.2% jump. According to China’s National Energy Administration, the country added 216.9 GW of solar capacity in 2023, marking a 148 % YoY increase compared to 87.4 GW in 2022. Major power generation enterprises invested CNY967.5 billion (~$151.17 billion) in power projects, representing a 30.1% YoY increase.

Non-banking financial company Ecofy secured an investment of ₹900 million (~$10.83 million) from FMO, a Dutch entrepreneurial development bank, to facilitate product diversification and support its expansion across India. The company provides loans to EVs, rooftop solar projects, and small and medium enterprises providing E2E digital experience. The investment will be divided into two equal tranches. It comes with a commitment to climate action and is intended to fuel Ecofy’s loan book.

SAEL, an India-based solar and agricultural waste-to-energy company, raised $1 billion in a funding round involving Norfund, the U.S. Development Finance Corporation, the Asian Development Bank (ADB), Tata Cleantech, and other financial institutions. Out of the total, ADB approved a ₹12.23 billion ($147 million) loan for a 400 MW solar project in Gujarat, and Tata Capital provided financing of ₹6.11 billion ($73.4 million). ADB led the financial structuring and mobilized domestic private capital

A new program to install rooftop solar systems on 10 million households across India was announced by Prime Minister Narendra Modi as part of the Pradhan Mantri Suryodaya Yojana initiative.The program aims to reduce the electricity expenditure of poor and middle-class households while enabling India’s self-reliance in the field of energy, the Prime Minister said in a post on the microblogging site X.

Public infrastructure finance company REC Limited has been designated as the overall implementing agency for the Grid-Connected Rooftop Solar Program, which aims to achieve 40 GW of rooftop solar capacity by March 2026. REC will be responsible for executing the program prepared by MNRE and coordinating with all stakeholders across the country for its effective implementation.

International Battery Company (IBC), a lithium-ion battery startup, raised $35 million (₹2.91 billion) in a pre-series A round led by RTP Global, a venture capital firm based in Bengaluru, and other Korean and U.S. investors. Singapore-based Beenext and Veda VC, an early-stage venture capital fund, also contributed to the investment. IBC operates an operational 50 MW facility in South Korea and aims to build a 2 GW lithium-ion factory in Bengaluru, which is expected to commence production by 2025.

State Bank of India (SBI) issued $250 million senior, unsecured, green floating rate notes through private placement facilitated by its London branch, set to mature on December 29, 2028. The bond, issued on a floating rate of 1.20% above the Secured Overnight Financing Rate, was listed on the Global Securities Market of the India International Exchange. The bond issuance is part of SBI’s $10 billion medium-term note program.

Mahindra Group and Ontario Teachers’ Pension Plan Board have announced an Infrastructure Investment Trust, dubbed Sustainable Energy Infra Trust (SEIT), with an initial capital raise of ₹13.65 billion ($165 million) to advance the renewable energy sector in India. The initial offer was subscribed by global and Indian investors, including the Asian Infrastructure Investment Bank, as SEIT made its debut on the National Stock Exchange of India.

REC Solar Holdings, a 100% step-down subsidiary of Reliance Industries, entered into a share purchase agreement with Norway-based Elkem to sell a 100% equity stake in REC Solar Norway for an aggregate cash consideration of ₹22 million. REC Norway is in the business of manufacturing kerf-based polysilicon in Norway. Elkem is a silicon-based material provider listed on the Oslo Stock Exchange. This transaction will give Elkem control of industrial areas and facilities in Norway, including areas next to Elkem’s activities at Fiskaa in Kristiansand.

Public infrastructure finance company REC Limited has issued its inaugural yen-denominated green bonds of ¥61.1 billion (~$420.9 million) to finance renewable energy projects. Issued under its $10 billion Global Medium Term Notes Program, the proceeds from the bonds will be used to finance eligible renewable energy projects under its green finance framework and the guidelines of the Reserve Bank of India. The green bonds with 5-year, 5.25-year, and 10-year tenures are issued at yields of 1.76%, 1.79%, and 2.20%, respectively.

The Directorate General of Trade Remedies (DGTR) recommended the extension of anti-dumping duty on the imports of Ethylene Vinyl Acetate (EVA) backsheets originating in or exported from China for five years. DGTR, in its recent investigation, found that EVA backsheets continue to be exported to India at prices below the normal value, resulting in their dumping. The directorate has recommended an anti-dumping duty of $590 /MT on EVA backsheet originating in or exported from China from Changzhou Sveck Photovoltaic New Material Company and $897 /MT for all other producers.

MNRE received the President of India’s approval to implement a new solar power program with an outlay of ₹5.15 billion (~$61.9 million) for Particularly Vulnerable Tribal Groups (PVTG) habitations and villages under the Pradhan Mantri Janjati Adivasi Nyaya Maha Abhiyan. The program aims to electrify 100,000 PVTG households in areas where electricity supply through the grid is not deemed techno-economically feasible with 0.3 kW off-grid solar power systems.

The Aggregate Technical and Commercial (AT&C) losses of distribution companies (DISCOM) decreased to 15.41% in the financial year (FY) 2022-23 from 17% in FY 2021-22, the Ministry of Power highlighted in its year-end review. The Ministry attributed the improvement to the various measures taken under the Revamped Distribution Sector Scheme. The program was introduced to help DISCOMs improve their operational efficiencies and financial sustainability by providing result-linked financial assistance to DISCOMs who achieve the basic minimum benchmarks and meet the pre-qualifying criteria.