CAT 2017 Verbal and Reading Comprehension

Directions for Questions 1-6
India's ambitious plans to meet its climate targets under the Paris Agreement on climate change offer a $3.1 trillion investment opportunity by 2030 in renewable energy, green buildings, transport, infrastructure, electric vehicles and climate smart agriculture, a new report by the International Finance Corporation has said.
While green buildings represent the largest chunk, $ 1.4 trillion, Alzbeta Kleium, IFC director and global head, climate business, said it was not only the government's renewables policy but the sector's competitiveness that was driving deployment both at the untility scale and on rooftops.
Bangladesh, India, Bhutan, Maldives, Nepal and Sri Lanka together have an investment potential of $411.4 billion in renewables. India's share is $403.7 billion.
The IFC study examined climate investment opportunities in the six countries, which together generate 7.4 percent of global carbon dioxide emissions.
The IFC, the private investment arm of the World Bank, has since 2005 invested $2.6 billion of its own funds in long term financing for climate smart projects in South Asia. It has also mobilised almost $ 1 from other investors.
According to Kleium, the IFC started doing climate business 10 years ago, beginning with the development of renewable energy mainly in Asia and Latin America and green bonds both on the IFC balance sheet and in companies where it was an investors. “Today, the climate business accounts for 25 percent of what we do. In India, the emphasis has been on renewables for six to seven years. We finance companies in India that account for 20 percent of the renewable market in the country”, she said in an interview to Business Standard.
Kleiun said the IFC saw as a concrete development the willingness of the government to implement renewable energy targets, enabling policies and a regulatory environment that supported renewables. With declining prices, however it takes longer for developers to repay. So, IFC is increasing financing tenors Aditi Maheshwari, climate change policy specialist at the IFC, said, “Creation of green building schemes and the green building code have provided signals to property developers to enter the green building market. Financiers are increasingly aware of this. We see a $1.4 billion opportunity during 2018-30 in this because half the buildings stock that will exist in 2030 is yet to be constructed”.
Kleiun said green bonds (a tax-exempt bond issued by federally qualified organisations or by municipalities) were still a small part of the overall bond market, dispite growing in double digit. This year, green bonds are expected to reach $120 billion globally. “We’re seeing investors who want green bonds in their portfolios”, she added.
Maheshwari said $3.2 billion worth of green bonds were issued till April on the basis of a framework by the Securities and Exchange Board of India and 68 percent of green bonds issued in India were for renewable energy followed by 20 percent for transport and 10 percent for green buildings. “As you see the implementation of targets and greater delivery, there will be greater issuance of green bonds,” she said.
Maheshwari said the government was taking measures to address concerns surrounding contractual issues. At the same time, other components need to be addressed. For instance, clarity on withdrawl of incentives will provide certainty to investors and allow staged progression to the market. There have been signals that incentives like the renewables purchase obligation and tax holiday will be withdrawn.
“In other markets, we have seen changes to power purchase agreements have stymied growth, so they (the government) would have something to be worried about”.
On the issue of tariffs, Kleiun said the cost of power generated from renewables was lower than the cost of power generated from coal in 30 emerging markets.
“When it comes to blips like the exchange rate or shortage of components, there may be some volatility. Solar and wind tariffs are extremely competitive”.