Villagers are dwarfed by giant windmills built by the Danish Development Agency in northern Philippines (File)

The Asian Development Bank is helping to finance a 100-megawatt wind energy plant in India as part of a drive to promote renewable energy sources in Asia. As Anjana Pasricha reports from New Delhi, India has emerged as the world's fifth-largest producer of wind energy.

India's first windmills were built about two decades ago, when a handful of small industries invested in wind turbines to escape the country's perennial power outages.

Today, windmills dot the landscape in several southern and western states, Tamil Nadu, Rajasthan, Gujarat and Maharashtra, producing a total of 6000 megawatts of power.

Now, with the economy soaring and the country hungry for energy, large private sector groups have begun making major investments in wind power. The government is offering tax breaks and other incentives to encourage them.

The latest initiative comes from India's largest private power company, Tata Power.

The company is building wind power facilities to produce 100 megawatts of power in Maharashtra state, with the help of an $80 million loan from the Asian Development Bank.

Ajay Sagar, head of the private sector and financial services group at the ADB in New Delhi, says wind power may account for only a tiny part of India's overall energy mix. But he says it is crucial for a rapidly industrializing country to explore clean energy sources.

"Renewable energy initiative is very important although the size could be small. But the advantages to the environment are huge," said Sagar. "For this Tata power project itself, it will contribute to a reduction of greenhouse gas emission by approximately 2.6 million tons of carbon dioxide during its projected life of 20 years."

So far, wind energy accounts for a meager one percent of the total power produced in the country. But India is now the world's fifth largest wind energy producer - behind Germany, Spain, the United States and Denmark.

India is also the third-largest consumer of electricity in Asia, behind China and Japan. More than two-thirds of the country's power is produced by thermal plants, and most of those are highly polluting coal-fired plants.

Over the next five years, wind energy generation is expected to more than double, with industries adding about 8000 megawatts to existing capacity.

That is still far short of India's potential wind-power generation, which has been estimated at 45,000 megawatts.

The government has identified more than 200 windy sites suitable for wind farms. Most of them are in southern and western India.