download banking services chronicle magazine pdf
download banking services chronicle magazine pdf Published this article page no First pension or sovereign funds are potent sources for patient capital for renewables. Top 400 Global funds manage assets of around US $ 75 trillion. Green bond issuance has surpassed US $120 billion. Even a small portion of proceeds from these funds could easily meet the investment required for renewables over a decade assuring a constant and low risk yield that simultaneously makes our planet green. In 2014 the Securities and Exchange Board of India (SEBI) introduced Infrastructure Investment Trusts (InvITs). The feedback from industry suggests that due to the current limitation of 49 per cent cap on leverage InvITs are unable to offer adequate returns in comparison to alternative investment avenues with similar assets. Second reducing cost of the foreign debt by reducing the currency hedging cost has potential to mobilize foreign capital and spur investment by reducing the cost of the capital. This would reduce the delivered cost of renewables and make them more competitive. An analysis by the Climate Policy Initiative suggests that the expected cost of providing a 10- year currency hedge through a Foreign Exchange hedging facility would be around 3.5 percentage points per year that would be broadly 50 per cent below the market rate. Third robust Payment Security Mechanism (PSM) will also contribute to de-risking the investment. Successive studies have confirmed that one of the most important risks to the Indian renewable energy sector is the counterparty credit risk associated with the risk of state-owned utilities delaying or defaulting on their contractual payments to power producers. The timeliness and reliability of payments for power purchase by state distribution companies remains a persistent risk for investments. The National Solar Mission has provisioned PSM for ensuring payment to the developers in case the distribution company falters in payment. Putting in place a well-structured PSM helps in lowering the off- takers risk and increasing investment attractiveness. download banking services chronicle magazine pdf
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