“There is an enormous potential for US companies to not only help India reduce greenhouse gases, but to take an active role in investments that can provide an excellent rate of return,” said Michael Gerrard, Andrew Sabin professor of professional practice and director of the centre for climate change law in a statement issued by the law school.
According to the founder of a venture capital fund that invests in green energy and an industry expert, “Standard documents are always useful. However, every deal in this green sector is of a different kind, which makes standardising difficult.”
“It would be useful if they can look at areas such as EPC contracts, contracts related to technology collaborations and consortium agreements. It will all depend on how creatively they use this opportunity,” another green energy expert added.
The project also aims to facilitate access of US equipment manufacturers as India begins increasing its power capacity by 80 per cent to meet its energy needs in 2030. It also looks at allowing US banks and investors to profit from clean-energy investment while fulfilling compliance requirements.
The move will also facilitate access to an estimated $1.1 trillion investment needed by India to install clean power and reduce substantial carbon dioxide emissions using available technologies.
“We recognise that as important as it is for India to grow, it needs to do so in an environmentally-sustainable fashion,” said YS Chowdary, chairman of the Sujana Group in the statement. “It’s vital that we figure out the most cost-effective ways to achieve that,” Chowdary added.
The legal tools developed by the project will be drafted by the US and Indian attorneys in consultation with experts in investment, project finance, and clean energy. The aim of the project is to make these contracts and legal documents available for free online so that these can be readily adapted for projects across India, thereby standardising the systems and processes in green energy market.
“Right now, there is a strong desire to pursue many clean-energy projects in India, but, too often, companies haven’t moved forward because of transaction costs that are both perceived and real,” said the project’s director Aarthi S Anand. “This is a way to streamline the process, so companies don’t have to draft contracts from scratch for each project,” Anand said.
Besides the contract-drafting efforts, the 18-month project will also include two international symposiums, in July 2011 and March 2012, to bring together major players in this sector.
“But time is of the essence. The longer we wait, the harder it will be to keep greenhouse gas levels within target ranges,” Gerrard added.
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