In March of this year, Indian developer Adani Green Energy raised $1.35 billion in financing to build a 1.69GW solar and wind hybrid power station in India.
The banks that provide financing loans include Bank of Mitsubishi UFJ, and 12 banks in the world: Standard Chartered Bank, Italy’s United Sao Paulo Bank, Mitsubishi UFJ Bank, Sumitomo Mitsui Banking Corporation, Rabobank, DBS Bank, Mizuho Bank, BNP Paribas, Barclays Bank, Deutsche Bank, Siemens Bank, and ABN AMRO Bank.
Mitsubishi UFJ Financial Group’s global renewable energy financing business
Of course, India is not the only investment target country. Mitsubishi UFJ Financial Group, ranked second in the world in terms of renewable energy business financing in 2019, has carried out related activities in other countries in the world. Mitsubishi UFJ Financial Group (MUFG) has implemented a US$163 million 300 MW financing in India
Azure Power, headquartered in India, recently received US$163 million in financing from Mitsubishi UFJ Financial Group (MUFG) for the development of a 300MW solar project in India.
The company mainly provides solar power for public utilities and commercial individuals, and in 2009 built India’s first public utility-level solar power project in Punjab, India, and its total power generation capacity has exceeded 7GW.
The financing of Mitsubishi UFJ Financial Group in India will be used to fund the construction of a 300 MW solar power station by Azure Power in Rajasthan, India. The financing period will be 5 years.
In recent years, Mitsubishi UFJ Financial Group, as a green structuring adviser, has been committed to investing in renewable energy. This investment in India is one of its many investment projects.
In the “Investment in the Infrastructure Fund for Climate Change Countermeasures in Emerging Countries” published on July 8 this year, its subsidiary Mitsubishi UFJ Bank decided to join the public and private companies operated by BlackRock (BlackRock, the world’s largest asset management company). The National Climate Change Infrastructure Fund (Climate Finance Partnership) invests.
The total amount of the financing is 500 million US dollars, which is mainly used for the development of renewable energy power generation, power saving, power storage, and power distribution equipment in emerging countries. It is expected to achieve the goal of reducing 17,000 tons of carbon dioxide annually.
As early as 2011, Mitsubishi UFJ Financial Group has begun to attach importance to India’s renewable energy power generation business. In the development undertakings in the electric power and energy fields at that time, India was designated as an “important strategic region” on par with China and Indonesia.
Therefore, in order to expand its overseas investment, Mitsubishi UFJ Financial Group began to pay attention to the renewable energy business of these emerging countries. In addition to financing local infrastructure-related state-owned enterprises, it faced loans from Japanese companies that actively entered India. It also increased substantially.
Mitsubishi UFJ Financial Group’s financing for the development of renewable energy in India
For example, in March this year, Mitsubishi UFJ Bank (Malaysia), a subsidiary of Mitsubishi UFJ Financial Group in Malaysia, announced that it was the legal leader and sole green building consultant for the 100MW solar power plant project in Perak, Malaysia.
The financing amount will reach 342 million Malaysian ringgits (approximately US$86 million).
In addition, the world’s largest solar power generation project in the UAE, which started in April 2019, also has investment from Mitsubishi UFJ Financial Group. The power generation scale of the project will reach 1,177MW, which will enable Middle Eastern countries that rely heavily on fossil energy power generation to enter the process of renewable energy development and utilization.
In Japan, Mitsubishi UFJ Trust Bank, a subsidiary of Mitsubishi UFJ Financial Group, aims to provide a “renewable energy investment fund” for institutional investors. As of the end of June 2019, the cumulative amount of investment in solar power plants in Japan will reach 10 billion days. Yuan and above.
Based on this investment, it is expected that electricity will be provided to approximately 10,000 ordinary households throughout the year, and at the same time, approximately 25,000 tons of carbon dioxide emissions will be reduced annually.
India’s current photovoltaic environment
From January to March 2021, India has added a total of 2056 MW of solar power generation capacity, an increase of 37% over the fourth quarter of 2020. According to Mercom’s CY Q1 2021 Indian solar market latest development report, compared with the 1090 MW newly added in the first quarter of 2020, the solar installation in India has increased by 88% year-on-year.
As of March 31, India’s cumulative solar installations reached 41 GW (including 35.5 GW of large-scale facilities and 5.4 GW of rooftop facilities), accounting for 10.7% of the country’s total power generation capacity.
Of the 2056 MW installed in the first quarter, 1749 MW came from utility-scale projects and 307 MW came from rooftop solar projects.
According to the latest report, India has added a total of 1.2GW of renewable energy power generation capacity from April to May 2021, including 1GW of solar energy and 0.2GW of wind energy. The new capacity in these two months is twice that of the same period last year and the highest in the past four years.
As of May 31, 2021, India’s total domestic power generation capacity reached 383 GW, of which conventional energy capacity was 288 GW (75% of the total) and renewable energy capacity was 96 GW (25%). At present, coal power is still the country’s main source of electricity, with an installed capacity of 209GW (accounting for 55% of the total share).
However, the installed capacity of solar power in India is 41GW and wind power is 39GW. Since 2016, the new capacity of solar energy has exceeded all other energy sources.
Mitsubishi UFJ Financial Group’s current achievements in renewable energy
Colin Chen, head of ESG financing for the Asia-Pacific region of Mitsubishi UFJ Financial Group, said that the company has played a leading role in financing a series of renewable energy projects in India and looks forward to the development prospects of the country’s renewable energy sector.
And will further use project financing and ESG (environmental, social and government governance) expertise to support the sustainable development of India.
According to the data published on the official website of Mitsubishi UFJ Financial Group, as of 2019, the amount of carbon dioxide emission reduction achieved by the company through financing and the total economic value it brings are slowly increasing. The emission reduction of carbon dioxide in 2019 is 1.7 thousand tons, and the total emission reduction is about 1323 thousand tons.
In each field, the number of cases and the cumulative ratio of economic benefits brought by them are also different. The number of renewable energy business cases accounted for 18.5%, but the economic effect brought by it accounted for 45.2% of the total.
In May 2021, Mitsubishi UFJ Financial Group issued the “MUFG Carbon Neutrality Declaration” facing one of the most serious problems facing the world-climate change. In order to achieve carbon neutrality-related business commitments, the Mitsubishi UFJ Financial Group will start from 2021 and will strengthen the system for strategic planning and promotion of functions.
In addition, in order to support the group business companies located in each region to lead the decarbonization of the global overseas market, we will cope with various overseas partners.