India’s Ministry of New and Renewable Energy (MNRE) has announced a goal of 3.4 GW of grid-tied and 130 MW of off-grid renewable energy generation to be added to India’s electricity grid during fiscal year 2011-2012.

The MNRE estimates that this will require a capital investment of $6.3bn, including $1.95bn in solar, and $217m in decentralised energy production.

MNRE also stated that there has been $1.07bn in foreign direct investment (FDI) in this sector over the last three years, with $104m invested in April-June 2011 alone. Ernst & Young has ranked India as the third best investment destination in the renewable energy sector, second only to China and the USA.

MNRE also outlined the measures that the Government has taken to facilitate both foreign and domestic investment in renewable energy. These include generation-based incentives, as well as a payment security mechanism for grid-connected solar power projects under India’s Jawaharlal Nehru National Solar Mission.

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