National clean energy fund: an insight to fund allocation
Student name: Mr Alok Raj Gupta
Guide: Dr Kamna Sachdeva
Year of completion: 2011
Host Organisation: Emergent Ventures India (EVI)
Supervisor (Host Organisation): Dr Aloke Barnwal
Abstract: The environmental cess of Rs 50 per metric tonne imposed on coal is looked upon as a milestone
in efforts to mellow down the emissions generated by the burning of fossil fuels. It is estimated
that the carbon tax would fetch revenue of about 535 million USD in the year following its
inception. As stated in the union budget speech the proceeds of the carbon tax will be used to
create a National Clean Energy Fund (NCEF) for funding ‘research and innovative projects in
clean energy technologies’. However, it would take more than just stating the ‘research and
innovative projects’ pursuits. An in-depth review of options of investments needs to be carried
out.
The principle objective of this paper is to find out avenues where the Clean Energy Fund would
be utilized to ensure the most optimum outcome. Given India’s GHG profile and stage of social
and economic development, there are many renewable energy issues that are yet to be
addressed, the direct benefit of which should accrue to the rural masses at large. The paper
devises a simplistic 3 stage model connoting an exercise through three stages, viz. identification
of critical opportunities, identification of appropriate financial instruments and risk assessment
of the project. By performing this exercise, it can be ascertained that the corpus of NCEF is
being optimally utilized. Besides the paper also contains a review section where clean energy
fund, as being executed in other countries and by various bilateral and multilateral agencies, are
discussed.
