A Clean Energy Future for India

Posted by Ben Hubbard
June 25, 2013
Indian Workers Install Solar Panels

India is just a few years away from becoming the world’s most populous country, but it’s a far cry from the world’s largest energy producer. The government of India has set ambitious targets to meet this demand and its continued economic productivity will hinge on its ability to meet them. The challenge—as well as the opportunity—is significant.

For this reason, USAID’s Development Credit Authority (DCA) has pursued an unprecedented new partnership to facilitate a groundbreaking investment in Indian clean energy. Through a DCA loan guarantee, announced by Secretary of State John Kerry yesterday at the start of the fourth annual U.S.-India Strategic Dialogue, our partners Nereus Capital and Northern Lights Capital Group will make a $100 investment in clean energy production. The partnership is expected to create hundreds of additional megawatts of sustainable energy capacity and will help to advance India’s nascent clean energy industry.

Here at the Development Credit Authority, this is the first time that we’ve partnered with a clean energy investment fund. We’re eagerly pushing the envelope to find new ways to stretch our investment even farther and for greater impact. While DCA averages an already incredibly high $28 leverage ratio for every dollar we invest—in this deal, we will secure a leverage rate that is exponentially higher. Through a comparatively tiny investment, we can catalyze four to five medium-scale clean energy projects directly and up to ten to twelve indirectly in sectors such as wind, water, solar, or biomass.

This investment could eventually create as much as 300 – 400 additional megawatts of sustainable energy capacity, which is equivalent to lighting the homes of tens of thousands of Indian families. These projects will serve a variety of customers, including both households that get by on just few dollars a day as well as larger or even multi-national companies.  Through reliable access to power, these companies will be better equipped to create jobs, make large-scale investments, and contribute to economic growth.

Incredibly, we can do all of this at virtually no cost to the American taxpayer.

By thinking creatively about how we partner with private sector actors, we’re continuing to use our resources and capacity more smartly and efficiently. We’re helping to ensure that U.S. financial institutions can securely invest in this market and build a clean energy future for India.

About the Author: Ben Hubbard serves as director of USAID's Development Credit Authority.Editor's Note: This entry also appears on the USAID Impact Blog.



Henry M.
United States
June 25, 2013
"300 – 400 additional megawatts"? That's ridiculous. This is the US trying to bully India into accepting colonial backwardness. An appropriate "clean energy" policy for India would be Thorium reactors.
Ashim C.
June 26, 2013
DCA and partner companies should consider undertaking an clean energy awareness campaign about their new technology and it's bebefits so that mass awareness is created in India about the benign effects of Indo-US relationship on environment & economy of India. This will also dispel the impression that US trade is focussed on defense oriented industry and such trade which have high royalty and IPR related content in price. Indian middle class imports gold worth US $ 40 billion annually. US FDI in India can attract a substantial part of this India investment if good return is assured. In energy sector this should not be too difficult. One wonders if clean energy projects could start in eastern states, where cost inputs to manufacturing are about the lowest and water, agro, forest and mineral resources are more plentiful than Western and Southern India, Fast development of eastern states would give India more competitive edge and would match well the look east policy, integration with ASEAN economies and make India more more participative in Asia Pacific strategic engagement of US.
Ashim C.
August 28, 2013
Further to my comment dated 20th June, I, as a supporter of atomic energy as clean energy and environmentally benign, want to observe that the recent slide in value of Indian Rupees and currencies of South Africa, Brazil and Indonesia, price wise advantage of oil based energy is fast evaporating in India creating favourable conditions for US-India collaboration in nuclear power generation.


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