New Delhi, July 23 (IANS): With infrastructure to generate renewable energy being costly, India needs to attend to the financial health of power distribution companies (discoms) and strengthen the payment processes so as to develop the clean energy industry, a member of the disbanded Planning Commission said on Thursday.

"To achieve the ambitious 3,000 gigawatt energy (target), we have to overcome the key challenges in the renewal sector. The infrastructure to generate renewables is quite costly, hence we need to look after the health of discoms and strengthen the payment processes," the panel's former member (energy) B.K.Chaturvedi said while inaugurating an international conference on renewable energy supported by the union new and renewable energy ministry.

"The net metering and implementation of transmission corridor must be resolved so that the industry can move forward," he said.

Earlier this year, Arvind Panagariya, the vice-chairman of the National Institution for Transforming India (NITI) Aayog that has replaced the Planning Commission, said it will work with states and central ministries to make electricity distribution companies become financially stable.

"Part of the solution to India's energy problem lies with energy distribution companies of states, which is extremely critical. Discoms are financially in an extremely weak state and if they are bankrupt, the producers will not trust them," he had said.

Meanwhile, the power ministry said on Thursday that an agreement for implementing the Partial Risk Guarantee Fund for Energy Efficiency (PRGFEE) to support energy efficiency projects has been signed between the Bureau of Energy Efficiency and the REC Power Distribution Co.

PRGFEE is a risk sharing mechanism to provide financial institutions with a partial coverage of risk involved in extending loans for energy efficiency projects, the ministry said in a statement here.