The telecom department plans to facilitate a mix of subsidies, grants and overseas borrowings through multilateral agencies to help cash-strapped telcos invest in green energy technologies mandated by the government. It is likely to push for a slew of financing options by leveraging the infrastructure status available to tower operators, says a telecom department (DoT) note.
“Financing alternatives, including external commercial borrowings from World Bank and Asian Development Bank”, in addition to “subsidies from the ministry of new & renewable energy (MNRE) and the National Clean Energy Fund (NCEF),” are in the offing, the note says. Tower companies will be eligible to easy bank financing, by way of softer interest rates and longer loan tenures since telecom towers enjoy infrastructure status. They will also be eligible for higher overseas borrowing limits, lower import duties and excise exemptions on telecom infrastructure equipment.
The latest overtures are aimed at assuaging concerns of telcos who maintain that they cannot afford the huge expenses needed to set up capacity for generating alternate sources of energy like solar, fuel cells, wind or biomass to meet DoT’s go-green targets. So much so, telecom operators and tower companies have been demanding viability gap funding (VGF) as a pre-condition to invest in capex-intensive green energy technologies.
The financing roadmap was recently discussed by DoT at a meeting with all telecom industry lobby bodies, where representatives of Telecom Regulatory Authority of India and the ministries of power, environment & forests, new & renewable energy were also present. The DoT is likely to announce details after global consultant PricewaterhouseCooper offers an estimate of the VGF required by the telecom sector for meeting the government’s green targets.
Since the stakes are huge, PwC’s Indian unit was engaged last year by the telecom industry to examine the techno-commercial feasibility of powering some 3.5 lakh mobile towers with alternative energy sources. It is expected to submit its report shortly. The green telecom policy requires mobile operators to migrate 50 per cent of all cell towers in rural areas and 20 per cent in urban areas to hybrid power by 2015.