China Ming Yang Wind Power Group Ltd. and Reliance Power Ltd. agreed with China Development Bank Corp. to raise $3 billion for new renewable-energy projects in India, the country’s planning commission said in a statement.
The bank will arrange funds after assessing plans by the two companies to build 2,500 megawatts of generation capacity in three years, China Ming Yang said in a separate statement.
Chinese wind-turbine makers are adding assets overseas as the local market faces a supply glut. China Ming Yang follows Sinovel Wind Group Co. and Dongfang Electric Corp. in winning orders for plant equipment in India as Prime Minister Manmohan Singh looks to boost generation to accelerate economic growth.
“The target to develop 2,500 megawatts in the next three years looks ambitious,” said Shantanu Jaiswal, a New Delhi-based analyst at Bloomberg New Energy Finance. The likelihood that financing from China will result in lower rates than Indian debt offers “some comfort,” Jaiswal said.
India plans to add 118 gigawatts of generation capacity in the five years to March 2017, more than double the volume in the prior five-year period. It attracted a record $6 billion of funds for wind-power projects last year, buoyed by government incentives. Funds in the first nine months of 2012 declined 39 percent from a year earlier as policy benefits ended in March.