INDIA'S LINE OF CREDIT TO SRI LANKA FOR SOLAR ENERGY
Recently, India has signed an agreement extending a USD 100 million Line of Credit (LOC) to Sri Lanka for projects in the Solar Energy Sector. The LOC is for a period of 20 years, with an interest of 1.75%. The agreement was signed between the Government of Sri Lanka and the Export-Import (EXIM) Bank of India. EXIM Bank is a specialized financial institution, wholly owned by the Government of India.
WHAT IS LINE OF CREDIT?
It is a credit facility extended by a bank or any other financial institution to a government, business or an individual customer that enables the customer to draw the maximum loan amount. The borrower can access funds from the line of credit at any time as long as they do not exceed the maximum amount (or credit limit) set in the agreement and meet any other requirements such as making timely minimum payments.
Significance of the LOC to Sri Lanka: It will help finance various projects in the solar energy sector in Sri Lanka, such as rooftop solar photo-voltaic systems for households and government buildings. Some of these projects were announced during the Founding Conference of the International Solar Alliance (ISA) held in March 2018 in Delhi.
INDIA'S INITIATIVES FOR GLOBAL SOLAR ENERGY COOPERATION
International Solar Alliance (ISA): The ISA was launched by the Prime Minister of India and the President of France in 2015 on the side-lines of the United Nations Climate Change Conference of the Parties (COP-21), with 121 solar resource rich countries lying fully or partially between the tropic of Cancer and tropic of Capricorn as prospective members. 89 countries have signed the ISA framework agreement. ISA’ vision is to enable One World, One Sun, One Grid (OSOWOG).
ONE SUN, ONE WORLD, ONE GRID (OSOWOG): It focuses on a framework for facilitating global cooperation, building a global ecosystem of interconnected renewable energy resources (mainly solar energy) that can be seamlessly shared.
SCHEMES FOR PROMOTING SOLAR ENERGY IN INDIA
- Recently, India achieved 5th global position in solar power deployment by surpassing Italy. National Solar Mission (a part of National Action Plan on Climate Change): The aim is to establish India as a global leader in solar energy by creating the policy conditions for its deployment across the country.
- Rooftop Solar Scheme: To generate solar power by installing solar panels on the roof of the houses, the Ministry of New and Renewable Energy is implementing Grid-connected Rooftop Solar Scheme (Phase II).
- Production-linked Incentive (PLI) scheme to promote manufacturing of high efficiency solar PV modules in India.
- Scheme for Development of Ultra Mega Renewable Energy Power Parks: It is a scheme to develop Ultra Mega Renewable Energy Power Parks (UMREPPs) under the existing Solar Park Scheme.
- Kisan Urja Suraksha evam Utthaan Mahabhiyan (PM-KUSUM): The scheme covers grid-connected Renewable Energy power plants (0.5 – 2 MW)/Solar water pumps/grid connected agriculture pumps.
- National Wind-Solar Hybrid Policy, 2018: its main objective is to provide a framework for promotion of large grid connected wind-solar PV hybrid systems for optimal and efficient utilization of wind and solar resources, transmission infrastructure and land.
- Atal Jyoti Yojana (AJAY): It was launched in September 2016 for the installation of solar street lighting (SSL) systems in states with less than 50% households covered with grid power (as per Census 2011).
- Suryamitra Skill Development Programme: To provide skill training to rural youth in handling solar installations.
INDIA-SRI LANKA CONFIDENCE BUILDING MEASURES
- Currency Swap Agreements: The Reserve Bank of India (RBI) had signed an agreement for extending a USD 400 million currency swap facility to Sri Lanka to boost the foreign reserves and ensure financial stability of the country, which is badly hit by Covid-19 pandemic.
- High Level Exchanges: Political relations between India and Sri Lanka have been marked by high-level exchanges of visits at regular intervals.
- India’s Support against Terrorism: During the course of the civil war, India supported the right of the Government of Sri Lanka to act against terrorist forces.
- The Indian Housing Project: It is Government of India’s flagship project of developmental assistance to Sri Lanka. Its initial commitment is to build 50,000 houses for those affected by the civil war as well as for the estate workers in the plantation areas.
- Addressing Fishermen Issue: Given the proximity of the territorial waters of both countries, especially in the Palk Straits and the Gulf of Mannar, incidents of straying of fishermen are common. Both countries have agreed on certain practical arrangements to deal with the issue of bona fide fishermen of either side crossing the International Maritime Boundary Line. India and Sri Lanka conduct joint Military (Mitra Shakti) and Naval exercise (SLINEX).
- Participation in Groupings: Sri Lanka is also a member of regional groupings like BIMSTEC (Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation) and SAARC in which India plays a leading role.
- SAGAR: Srilanka supports India’s concern for the security of Indian ocean with its ‘Neighbourhood First’ policy and SAGAR (Security and Growth for all in the Region).
TEST YOURSELF
Q.1 India has signed an agreement extending a USD 100 million Line of Credit (LOC) to Sri Lanka for projects in the Solar Energy Sector. The agreement was signed between the Government of Sri Lanka and the ___________?
- Industrial Finance Corporation of India Ltd
- Export Credit Guarantee Corporation of India
- Export-Import Bank of India: ANSWER
- None of the following
Q.2 Recently, India achieved 5th global position in the world in solar power deployment by surpassing which of the following countries?
- United Arab Emirates
- Italy: ANSWER
- Saudi Arabia
- None of the above
Q.3 Consider the given statements & state which of the following is/are correct in the context of the International Solar Alliance (ISA)?
- International Solar Alliance (ISA) was launched by the Prime Minister of India along with the President of France & Prime Minister of Israel.
- It was launched on the side-lines of the United Nations Climate Change Conference of the Parties (COP-21), with 121 solar resource rich countries.
- 89 countries have signed the ISA framework agreement whose vision is to enable One World, One Sun, One Grid (OSOWOG).
- I & II follows
- Only III follows
- II & III follows: ANSWER
- None of the above
Q.4 Which of the following scheme was launched in September 2016 for the installation of solar street lighting (SSL) systems in states with less than 50% households covered with grid power
- National Wind-Solar Hybrid Policy
- Suryamitra Skill Development Programme
- Kisan Urja Suraksha evam Utthaan Mahabhiyan (PM-KUSUM)
- Atal Jyoti Yojana (AJAY): ANSWER
Q.5 Both India & Sri Lanka have many common interests & they are the members of the same Organisation. Which of the following is not one of them?
- Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation (BIMSTEC)
- South Asian Association for Regional Cooperation (SAARC)
- Association of South-East Asian Nations (ASEAN): ANSWER
- None of the above
