India: Investment intentions pick up: CMIE

• In 1Q22, India witnessed a big increase in new investment proposals. 660 new project proposals with an investment of INR5.1tr to create new productive capacities were recorded during the quarter.
• This is big compared to the average of INR3.1tr worth of new investment projects that were recorded in 4Q21.
• In FY21, new investment proposals averaged INR2.1tr, which went up to INR3.6tr in FY22. Before the pandemic, new investment proposals averaged at INR4.5tr per quarter in FY20.
• Most of the new investment proposals seen in 1Q22 come from the various Memoranda of Understanding (MoU) and Letter of Intent (LoI) signed by Rajasthan Renewable Energy Corporation during the Invest Rajasthan 2022 Summit held during Jan 22.
• Investments worth INR3.1tr were signed by the Corporation during this summit. The largest is the INR1tr 20,000 megawatt solar power project proposed to be set up by Reliance New Energy Solar.
• The project would be spread over 100,000 acres of land in five western Rajasthan districts of Jaisalmer, Jodhpur, Jalore, Barmer and Bikaner.
• Land for the project will be provided by Rajasthan Renewable Energy Corporation. Land will also be provided by the Corporation for three more solar power projects in the state.
• Each of these would set up 10,000 megawatt solar power generation capacity. The three entities involved are SJVN (Satluj Jal Vidyut Nigam) that envisages an investment of INR0.5tr for the project, NTPC (National Thermal Power Corpn) with an investment of INR0.4tr and THDC India (a subsidiary of NTPC for the Tehri Hydro Power Complex) that also envisages an investment of INR0.4tr for the project.
• In neighbouring Gujarat, ArcelorMittal Nippon Steel India signed an MoU with the Gujarat Government as a part of the Vibrant Gujarat Global Summit 2022 to invest INR0.4tr for a solar, wind and hybrid power generation project in the state.
• The cumulative capacity of this project is 10,000 megawatts. NHPC (National Hydro Power Corpn) has also signed an MoU with Rajasthan Renewable Energy Corporation for an investment of INR0.2tr for a 10,000 megawatts solar power project in Rajasthan.
• In total, 27 renewable energy projects were announced in 1Q22. These cumulatively involve an investment of INR3.1tr, which is nearly 61% of the total new investment proposals made during the quarter.
• Total investment in the power sector in 1Q22 was INR3.3tr. This is the largest ever investment proposed in the power sector in any quarter. And almost all of it is into renewable power.
• Investments into the power sector in this quarter account for 65% of total investment proposals made during the quarter. This is again the largest share claimed by the power sector in total investments in any quarter.
• The INR1tr Reliance New Energy Solar project is the largest single new investment project seen since the INR1.4tr Mumbai-Pune-Hyderabad High Speed Railway project announced in Dec 19.

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