US Ambassador to India Richard Verma and Secretary Upendra Tripathy of India’s Ministry of New and Renewable Energy signed a Memorandum of Understanding in June establishing the PACEsetter Fund, which will finance joint operations aimed at commercializing off-grid clean energy projects headed by renewable energy companies. With the goal of creating affordable and efficient products, the PACEsetter Fund focuses specifically on financing projects that will provide clean energy to communities with no or limited access to power grids.
With $7.9 million in initial funding secured from the US and India, the two nations’ Promoting Energy Access through Clean Energy (PEACE) initiative may begin to see real progress. Launched during Prime Minister Manmohan Singh’s visit to the US in September 2013, PEACE aims to spur innovation in the clean energy sector and share information on the research and application of off-grid clean energy technology. While most hands-on work will be done by grant-funded businesses, these companies will collaborate with both governments in order to ensure quality control and cost efficiency so as to create products suitable for wide usage.
Energy cooperation has become an increasingly prominent focal point of US-India relations over the past decade, as well as of US engagement with Southeast Asia in recent years. In 2005 the American and Indian governments launched the US-India Energy Dialogue, which promotes policy discussion, energy trade, and the deployment of clean energy technology. Four years later, Prime Minister Singh and President Obama launched the Partnership to Advance Clean Energy (PACE) to stimulate public-private cooperation on clean energy research and development. In similar efforts to bring renewable energy to Southeast Asia, the US pledged $6 billion in investment last year for the Asia-Pacific Clean Energy Program and signed major solar energy deals with the Burmese government in September 2014 that are expected to provide a 12% boost in the emerging nation’s power output by 2016.
As the third largest single emitter of greenhouse gases, India has drawn a fair amount of criticism for openly acknowledging that increased emissions are an inevitable byproduct of government efforts to expand the country’s economy and alleviate poverty. After agreeing to accelerate financing for off-grid projects during President Obama’s January visit to India and evenly splitting the contributions to the PACEsetter Fund with the US, however, the two countries offer hope for further collaboration in combatting climate change, an issue on which Prime Minister Narendra Modi says India must lead.
American and Indian officials plan to discuss the particulars of the fund at the India Off-Grid Energy Summit later this month.