In September 2020, India and Denmark signed a Green Strategic Partnership to advance political co-operation, expand economic relations and strengthen co-operation in addressing global challenges and opportunities.
In a freewheeling discussion with BusinessLine , Freddy Svane, Denmark’s Ambassador to India, shares the progress achieved through the partnership so far, challenges and opportunities for green financing in India, how Denmark can help India achieve its ambitious renewable energy target and why bilateral trade and FDI inflows from Denmark still remain low. Excerpts:
What has been the progress so far with India-Denmark Green Strategic Partnership signed last year?
We selected four advanced tracks — water, energy, green financing and climate. We have developed a detailed action plan across 22 different sectors, with specific goals, objectives and key performance indicators for intervention.
For instance, if you take water, we are going to soon have a three-year working programme with the Jal Shakti Ministry.
Likewise, next week, I am going to sign an agreement with the Ministry of Housing and Urban Affairs to tap into what we call the urban dimension of Jal Jeevan. In energy, we are also planning to set up a Centre of Excellence for Offshore Wind.
Green financing is a big challenge especially in a developing country like India...
Today, there is a lot of green financing, but the problem is how do we get that to countries like India. What kind of risks are involved? We need some kind of de-risking mechanism that can alleviate the risks of sovereign funds if they want to invest in green funds in India. So that’s why we, at the embassy, have decided that from August 1, we will have a specialised counsellor who will look into securing green financing.
In Denmark, we have a special trust, IFU, which helps Danish companies in investing in developing countries. Recently, they invested in the big solar project of Acme Solar in Rajasthan to promote solar.
The whole idea is to bring together all kinds of funds that are available. We are also reaching out to private developers and, if you take wind, we have two very important developers — Orsted and CIP (Copenhagen Infrastructure Partners).
They are extremely good at generating funds for green investments across the world and now they are really looking at India.
How will India-Denmark energy partnership help?
India’s use of power is one-third of global average. The Indian economy will peak at some point in time and, through this partnership, we tell the Indian side – ‘Don't do the same mistake that we once did’ because we spoiled the whole world. When you are peaking your economy, you should move towards more energy efficiency. Do it in a green and sustainable way, that’s so important. You should develop your economy but do it in a smarter and clever way and that’s why we will offer our skills and so will other countries.
Off-shore wind energy is the next frontier for India. What opportunities do you see here?
India has an ambitious goal for renewable energy which is 450 GW by 2030. 30 GW has been set aside for wind energy and that includes offshore wind. We know that offshore wind will be quite costly initially, but what we have also experienced in our part of the world is that the price will come down quite drastically.
India is already a manufacturing hub for onshore wind turbines and blades. So, why not take the next step and harvest off-shore wind. I know you love solar power, but wind is also an important source of renewable energy and why not utilise it. Also, remember that it will create a lot of jobs.
In solar manufacturing, currently 80-85 per cent of all manufacturing is happening outside India. The wind sector is different. Some people say even 90 per cent of the turbines and blades are already manufactured here in India; so we have the technology and ecosystem. Why not utilise that for offshore wind? You have a long coastal line. The big issue is when you generate electricity from offshore wind farms, it comes at a certain price. Can you get that price in the market? It doesn’t look possible and there is a gap, so the question is how to finance this gap. Would you pay for it? How do you secure that gap?
We hope that the Centre of Excellence will not only make India a technology hub for offshore wind energy but also a manufacturing hub.
Denmark and India share a very cordial relationship but the FDI from Denmark into India is just 0.13 per cent. Why is it so low?
It depends on how you measure these things. Danish companies may not invest in India from their headquarters in Copenhagen, but it might come from Singapore or even from the US. Therefore, I don’ t think these numbers reflect that. I am pretty sure, if you take all the major Danish companies like Vestas, Grundfos, Danfoss and Maersk, what they are investing does not necessarily come from Denmark.
The India-EU FTA has been in works for many years now. Do you see it happening?
The political reality is that India and EU will have to conclude an agreement and the sooner the better. India is extremely serious about it. Both the parties have agreed to restart the negotiation very soon and the time is running out.
India has for many years reached out to Europe and sees it as an important partner not only for the economy but also from a larger context. Europe is also looking towards India which has 1.4 billion people. Political reality tells me that there is no choice but to get it done and all the hassle that has brought this negotiation to a standstill in 2013 is gone.