(MENAFN- KNN India)
New Delhi, Dec 20 (KNN)
In a significant trend for India's energy sector, renewable energy projects claimed all project finance loans for the third consecutive year, with 8.77 GW of capacity funded in 2023, according to a new report released Friday by the Centre for financial Accountability.
The coal vs Renewables investment Report reveals renewable energy financing surged 63 per cent to INR 30,255 crore, while coal-linked companies separately received corporate financing of INR 25,945 crore.
The renewable energy sector demonstrated remarkable growth, with funded capacity more than doubling compared to 2022. However, India's progress toward its clean energy goals faces challenges.
The country's total installed wind and solar capacity reached 118 GW in 2023, with total non-fossil fuel capacity including hydro and nuclear sources at 188 GW – suggesting a significant gap in meeting the nation's 500 GW non-fossil fuel target by 2030.
Primary financing dominated the renewable sector, representing 77 per cent of deals, with refinancing accounting for the remaining 23 per cent.
Gujarat emerged as the leading state for renewable energy investments, securing INR 9,857 crore for 2.2 GW of capacity, representing 25 per cent of all financed renewable capacity.
Karnataka followed with INR 4,593 crore for 663 MW of capacity. Solar power maintained its position as the primary renewable technology, accounting for 49 per cent of renewable energy deals, while hybrid projects comprised 46 per cent and wind projects 6 per cent.
Commercial banks played a crucial role in driving renewable energy growth, providing INR 20,625 crore, equivalent to 68 per cent of total loans. Union Bank of India led the lending landscape with loans worth INR 4,500 crore.
The sector also saw a 31 per cent increase in average deal size compared to 2022, with the top five sponsors averaging INR 4,786 crore per deal.
Despite the absence of direct project finance for coal power projects, coal-linked companies maintained significant financial support through corporate financing.
Adani emerged as the largest recipient, securing 65 per cent of these funds and establishing a strong presence in both renewable and coal-linked financing. Underwriting services dominated coal-linked company financing at 96 per cent, with direct loans comprising just 4 per cent.
U.S.-based financial institutions provided the majority of corporate financing for coal-linked companies, contributing 65 per cent of total funds.
Jefferies Financial Group, in particular, provided over USD 2 billion in underwriting services to Adani and JSW Energy in 2023.
The findings highlight India's complex energy transition, where substantial growth in renewable financing coexists with continued support for coal-linked enterprises.
This dual trajectory presents both opportunities and challenges as India pursues its ambitious clean energy targets while managing economic growth imperatives.
The report serves as a crucial indicator of the evolving dynamics in India's energy financing landscape, revealing both progress in renewable energy development and the persistent influence of coal-linked corporate funding.
(KNN Bureau)
MENAFN20122024000155011030ID1109017633
Legal Disclaimer:
MENAFN provides the information “as is” without warranty of any kind. We do not accept any responsibility or liability for the accuracy, content, images, videos, licenses, completeness, legality, or reliability of the information contained in this article. If you have any complaints or copyright issues related to this article, kindly contact the provider above.