NEW DELHI: International Finance Corporation (IFC) has big plans to invest in India's renewable energy space as the sector is evolving with competitive commercial bidding unlike the subsidy-driven growth in the West, a top executive at the World Bank's investment arm said. IFC joins other global players such as Goldman Sachs, SoftBank and SunEdison in plans to invest in the country, which is aiming to make a quantum leap in the production of solar and wind energy.

Sujoy Bose, IFC's global head of infrastructure and natural resources, said there were several positives about India's renewable energy dreams and IFC would invest in projects that come up as part of the country's ambitious target of adding 1 lakh megawatts of renewable power.

IFC, which has a $5-billion commitment in India, has already funded companies such as Mahindra Solar and NSL Renewable, and recently issued a 'green Masala bond', raising Rs 315 crore for private sector investments that address climate change.

Bose also highlighted certain factors that renewable projects should focus on to be successful. "For these projects, there are three factors — the project cost has to be viable, the operation and maintenance have to be extremely tight and the financing has to be attractive," Bose told ET.

He said the cost of renewable power was coming down, approaching the level of conventional electricity. In the recently held competitive bidding for solar projects, tariffs fell to as low as Rs 5.05 per unit in Madhya Pradesh and Rs 5.17 in Telangana.

"The fact that these projects have been able to come up and supply power at these attractive prices shows that the financing packages are there to support them and hence the sector has a lot of legs going forward. So, we expect to definitely continue to invest in India and it is going to be a large part of our portfolio going forward in the renewable space as well," he said. IFC has withdrawn from investing in coal-based projects given its commitments to environment, Bose said.

IFC's last investment in the black-fuel based project was Tata Power's Mundra power project.

"It is something that has been agreed with our board over the last few years. We operate in a pretty restricted framework for coal and have not got any request within that framework for any project," Bose said when asked if IFC had completely exited from investing in coal-based projects.

IFC had invested $400 million in Tata Power's Mundra project in 2008 through debt and provided guidance on environment and social practices.

IFC, which follows a July-to-June financial year, has its biggest portfolio exposure in India. As of June 30, 2015, its committed portfolio in India was about $5 billion, accounting for about 9-10% of its global portfolio.

Riding the renewable wave, IFC expects to increase its investment in the infrastructure segment. Currently, it invests around $500-600 million per year in India's infrastructure segment, over a third of which is in renewables.

Reducing transmission and distribution losses would be the key driver of the government's plan of providing 24X7 power to all by 2019, Bose said. IFC is keen to engage in opportunities in the transmission and distribution segment as well.

"I realise that in the Indian context there are challenges but to me making the distribution companies more efficient and reducing transmission losses will go a long way in helping us solve the problem of the power sector in India," he said.