Pradip Sen Alternative and green energy resources like hydropower, wind power, biomass, fuel cell, solar PV, geothermal and other unconventional resources constitute a high potency growth segment. In India, green energy generation has been on the priority list for quite some time, but its potential is yet to be realised because many unhelpful conditions affect viability of green energy. Inadequate power distribution networks, high cost of generation and absence of focussed approach are impediments in making green energy a preferred alternative. Recently, the government acknowledged the need for increasing hydropower generation and announced a set of relief measures but took no proactive steps for identifying viable hydropower generation projects and extending project oriented help and support to entrepreneurs. In the case of wind power, the incentives offered by the government are very supportive but lack of identification of potential sites with site data on wind direction, wind velocity and other technical aspects are yet to be addressed. Biomass is not only a renewable energy resource, but also the most important fuel worldwide after coal, oil and natural gas. Traditional use of biomass is more than its use in modern applications. In developed world, biomass is becoming important for both heat and power generation. Biomass-based power initiatives are also being encouraged by the centre and state governments but not much has been done after formulating the policy. One good thing about the policy on biomass power projects is that it provides for one project in every district. It can ensure adequate availability of raw material for the project. Though biomass projects are viable techno-economically, but getting these projects financed is difficult. Power purchase agreements with state governments are not remunerative enough for making the projects attractive for financing by banks. The cost of production is quite high because of high expenses involved in collecting biomass from rural sources. As a result biomass-based projects have been sanctioned for many districts in most states, but the success rate of implementation is very low. It will take time to develop an effective supply chain in rural India. The need for greater generation of green energy is unquestionable because we must leave a better environment for the next generation. The cost of conventional or grey energy generation has increased multifold over the last couple of years. The narrowing of the price gap between grey and green power should increase the demand for green power. Being the only sources for green energy, biomass, wind and hydropower are likely to earn rich dividends. Universally the scope for setting up new hydropower stations is extremely limited for environmental reasons. Therefore, the industry will have to go for more installations in biomass and wind power because these are the only green energy resources can be expanded. Actually the expansion is already in progress the world over. In the west, wind power capacity is projected to grow 20 times by 2010 from the 1995 base. This growth of wind power is also expected to benefit pumped storage hydropower in the European electricity business because the pumped storage plants supplement wind power and keep the European grids stable when air dies down. As a matter of fact, large commercial banks, investment banks, investment firms and venture capital funds are enthusiastically exploring investment options in this segment but these options are for part finance or support finance depending on the projected return on investment. Venture capital participation in renewable energy is noticeable. In 2004, the total venture capital investment in renewable energy sector in the US totalled about $1 billion. In solar PV, venture capital grew at a compound growth rate of100%. Projected growth for PV and wind energy is reportedly expected to grow $ 40-50 million a year during 2010-2014. Sources of public financing include bilateral agencies, United Nations agencies and matching contributions from beneficiary countries. Agencies that are quite active include Asian Development Bank, UNDP, UNEP, European Bank for Reconstruction and Development, Inter-American Bank and UN Industrial Development Organisation. Denmark, France, Germany Italy, Japan and Sweden are also active. Besides, UN Food and Agricultural Organisation, Australia, Canada, Netherlands, Switzerland and United Kingdom provide technical assistance as well as funding on year-to-year basis. However, in the Indian context, the government of India should allocate a fund to be given as term loan to green energy projects at low interest rates through state/central financial institutions or may be Nabard. Basically, the green energy generation has to be supported not only because of its commercial viability but also for the maintenance of clean environment and overall long-term benefits. The author is group senior vice-president, Jain Group of Industries