Energy Sector Current Affairs - 2020

Asian Development Bank to invest 100 million USD in NIIF

On March 30, 2020, the Asian Development Bank announced that it is to invest 100 million USD in National Investment and Infrastructure Fund (NIIF). The investment during an economic slow down is a great boost for the Indian Economy.

NIIF

The National Investment and Infrastructure Funds were set up in 2015. The main purpose of the fund is to aid Greenfield and brownfield projects in the country. When an entity is to use the benefits of the funds, the Indian Government invests 49% and the rest has to be raised from third party investors.

The NIIF makes it mandatory that the funds shall be invested in the areas such as transportation, energy, water, housing, waste management.

Major funds of NIIF

There are three major funds under NIIF. IT includes Master Fund, Fund of Funds and Strategic Investment Fund

Master Fund

This is an infrastructure fund. These funds shall be used in core infrastructure sectors such as ports, road, power, etc.

Fund of funds

The fund of funds shall be used on affordable housing, green infrastructure and infrastructure services. These funds are availed only to fund managers who have good track on infrastructure projects

Strategic Investment Fund

This fund is registered under SEBI. These funds focus on green field and brown field investments.

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Import duty on Green Energy Equipment hiked by 20% in Budget 2020-21

The Budget 2020-21 that was presented by the finance Minister Nirmala Sitaraman in the Parliament increased the import duty of green energy equipment like cells by 20%. This is being implemented to drive local manufacturing of the equipment and lowering the import of low-quality Chinese equipment.

The step is being introduced to protect the local companies and to boost Make in India strategy.

Highlights

The Energy markets is currently one of the fast-growing markets in India. However, the market is dominated by the Chinese companies for their competitive prices. The GoI had earlier imposed safeguard duty over solar cells and models that are imported from Malaysia and China in July 2018. This is to expire by July 2020. Hence, the budget has introduced new duties.

India’s Scenario

India is the third largest consumer of energy after US and China. The manufacturing capacity of India is 3 GW for the solar cells. In spite of this, in 2018-19, India imported 2.16 billion USD worth solar photo voltaic cells.

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