Global S&T Development Trend Analysis Platform of Resources and Environment
Transitional Foreign Exchange Debt Platform: Paths to Enable Foreign Currency Debt to the Rooftop Solar Sector in India | |
Vinit Atal; Dhruba Purkayastha and Gireesh Shrimali | |
2018-07 | |
出版年 | 2018 |
语种 | 英语 |
国家 | 美国 |
领域 | 气候变化 |
英文摘要 | Low access to debt capital remains one of the key barriers to achieving the Indian government’s target of 40GW of rooftop solar installations by 2022. Foreign capital can help bridge the gap in debt availability for rooftop solar, however, foreign currency debt exposes rooftop solar project sponsors to the risk of foreign exchange rate fluctuation. Specifically, rooftop solar sponsors are reluctant to use foreign currency debt due to a variety of factors:
Taken together, there are market gaps for small-scale rooftop solar project sponsors accessing the most commonly used hedging instruments i.e. cross-currency swaps, options and call-spread strategies. These barriers may be circumvented by either reducing the credit risk exposure to the borrowers by the hedge providers in the form of guarantees, or by transferring the foreign currency from the borrowers to another stakeholder by routing the loan through an intermediary. This instrument design case study for the US-India Catalytic Finance Solar Program (USICSF) explores solutions to enable foreign currency debt to the Indian solar rooftop sector through the lens of a case study of debt investment by the Overseas Private Investment Corporation under the US-India Clean Energy Finance Facility program. Analyzing all the pertinent constraints to the stakeholders in this case study (including borrowers, hedge providers, donor entities, guarantors and the lender) we propose a solution that appears most feasible: A Transitional Foreign Exchange (FX) Debt Platform. We also identify and assess alternative, but noteworthy solutions, which may be successfully implemented under different contexts and preconditions. Proposed Solution: Transitional Foreign Exchange Debt Platform The Transitional FX Debt Platform entails routing foreign currency debt from OPIC through a local Indian private sector financial institution as the intermediary, on to the borrowers in INR. Figure ES1 illustrates the structure of this solution. We find that the following elements would be critical to the success of such a platform:
Under the Transitional FX Debt Platform, each dollar of donor grant capital invested in the Platform enables $17 to $34 of additional foreign debt into the solar rooftop sector. Figure ES1: Structure of the Transitional Foreign Exchange Debt Platform
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英文关键词 | climate finance developing economies energy finance risk mitigation |
URL | 查看原文 |
来源平台 | Climate Policy Initiative |
文献类型 | 科技报告 |
条目标识符 | http://119.78.100.173/C666/handle/2XK7JSWQ/242539 |
专题 | 气候变化 |
推荐引用方式 GB/T 7714 | Vinit Atal,Dhruba Purkayastha and Gireesh Shrimali. Transitional Foreign Exchange Debt Platform: Paths to Enable Foreign Currency Debt to the Rooftop Solar Sector in India,2018. |
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文件名称/大小 | 文献类型 | 版本类型 | 开放类型 | 使用许可 | ||
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