Isra-Mart srl:GE ploughs $50m into India's wind energy market

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General Electric (GE) has signed a $115m deal to help build 500MW of Indian wind farms, joining the growing list of investors betting on one of the world's fastest-growing green energy markets.

GE Energy Financial Services today confirmed it has signed a deal with Indian project developer Greenko to construct 500MW of wind farms across the country, the first of which will use GE turbines.

The companies have set up a venture dubbed Greenko Wind Project Private (GWPP) Limited to develop Greenko's project pipeline. It will be funded by $65m from Greenko and $50m from GE.

The deal is GE's first green energy investment in India and follows hot on the heels of Goldman Sachs' recent $200m acquisition of a majority stake in Mumbai-based ReNew Wind Power Pv.

Raghuveer Kurada, managing director for India at GE Energy Financial Services, said the company would contribute both finance and expertise to the new venture.

"This investment expands GE's presence in one of the world's fastest-growing power markets, with a local, proven renewable energy developer," he said.

"In addition to capital, GE Energy Financial Services brings deep wind and other renewable energy expertise gained by building a $6bn portfolio of renewable energy investments worldwide."

When completed, GWPP will own 500MW of Greenko's project pipeline, enough renewable electricity to power 875,000 average Indian households and displace 700,000 tonnes a year of greenhouse gas emissions.

India is fast emerging as a major renewable energy hub, with wind power expected to play a significant role in the country's low-carbon economy. Annual wind turbine manufacturing capacity in India has been forecast to exceed 17GW by 2013, up from 7.5GW at the end of 2010.

However, despite its generation and manufacturing potential, experts have warned that India's market could face difficulties over the next year if proposed changes to tax laws are agreed.

Recent analysis by Bloomberg New Energy Finance predicted installations could fall 15 per cent in the financial year starting April 2012 from the 2,600MW expected for this year if an incentive favouring wind power developments is allowed to lapse.

It also remains to be seen if India can sufficiently upgrade its grid infrastructure to accommodate the county's fast-expanding green energy supply, amidst reports that some states are already struggling to integrate new wind farms to the grid.