Norway invests in Indian solar projects, seeing it as a priority market

India is aiming for a massive ramp-up of its renewable energy capacity, but achieving its goals is a huge challenge.

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Norway’s Climate Investment Fund and the country’s largest pension company, KLP, are set to invest in a 420 MW solar power project being developed in Rajasthan, India.

Both parties will invest about 28 billion Indian rupees (about $35 million) for a 49 percent stake in the Thar Surya 1 project being built by Italian company Enel Green Power.

According to a statement issued by the Norwegian Embassy in India, the Climate Investment Fund has prepared to allocate 10 billion Norwegian kroner (about 1 billion dollars) for projects in the next five years.

The embassy also described India as a “priority market”, on track to become the planet’s most populous country next year.

This comes as Norway’s development finance institution, Norfund – which manages the Climate Investment Fund – and Enel Green Power have established an India-focused strategic investment partnership.

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“This is the first investment we have made with Enel, and we have great ambitions to contribute to similar investments in India in the coming years,” Norfund CEO Telef Thorleifson said in a statement on Monday.

While it is investing in renewable energy projects, Norway’s oil and gas reserves make it a major exporter of fossil fuels.

“In recent years, Norway has supplied between 20 and 25 percent of the gas demand of the EU and the United Kingdom,” Norwegian Petroleum said.

“Almost all oil and gas produced on the Norwegian shelf is exported, and combined, oil and gas account for more than half the value of total Norwegian commodity exports,” it adds.

India’s goal

India’s Ministry of New and Renewable Energy has said that the country’s solar power capacity has increased from about 2.6 gigawatts to 46 gigawatts in the past seven and a half years.

India wants its renewable energy capacity – excluding big hydro – to reach 175 GW this year, a challenging target. As of June 30, installed renewable energy capacity, excluding large hydro, stood at 114.07 GW, according to a recent statement by India’s Minister of State for New and Renewable Energy.

Despite its renewable energy targets, India remains dependent on fossil fuels. At the end of June, the share of fossil fuels in India’s total installed generating capacity was 58.5%, according to the Ministry of Power.

At last year’s COP26 climate change summit, India and China, both among the world’s biggest coal burners, pushed for a last-minute change to the fossil fuel language in the Glasgow climate accord – from “phase out” of coal to “phase out”. Down.” After initial objections, opposing countries eventually conceded.

In a speech at the Energy and Resources Institute’s World Sustainable Development Summit in February 2022, Indian Prime Minister Narendra Modi said he strongly believes that “environmental sustainability can only be achieved through climate justice”.

“The energy needs of the people of India are expected to almost double in the next 20 years,” Modi said. “To deny this energy is to deny millions of lives. Successful climate action also requires adequate financing.”

He added, “For this, developed countries should fulfill their commitments in terms of finance and technology transfer.”

European interest

Norway’s interest in India’s renewable energy sector represents the latest example of major organizations and businesses playing in the country.

Earlier this year, for example, German energy company RWE and India’s Tata Power announced a collaboration focused on developing offshore wind projects in India.

“India has excellent wind resources, which can help meet the country’s growing energy demands,” Sven Utermohlen, CEO of offshore wind at RWE Renewables, said in a statement.

“If there are clear regulations and an effective tendering scheme, we expect India’s offshore wind industry to gain real momentum,” he said.

— CNBC’s Sam Meredith contributed to this report.

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