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New Delhi
India requires around ₹33 lakh crore for setting up 500 gigawatts (GW) of non-fossil fuel capacity by 2030, of which the public sector banks (PSBs) will lend Rs 10 lakh crore by 2030, Department of Financial Services (DFS) Secretary M Nagaraju said on Wednesday.
“The requirement is ₹33 lakh core by 2030, but only from the public sector banks, we will be able to meet about ₹10 lakh crore by 2030 and the remaining ₹23 lakh crore has to come from other sources. That’s what the country needs to look at,” he said at an event here.
The DFS Secretary flagged issues that are adversely impacting financing of renewable energy (RE) projects by banks and financial institutions.
“Main thing is delayed payments by the people (Discoms) who signed power purchase agreements (PPAs). That’s one issue that is a risk for business and financial institutions to fund. The other is delayed land acquisition. Also, infrastructure evacuation for the power generated,” he pointed out.
Sectoral limits
Banks are constrained due to the sectoral limits set out by the RBI, said Nagaraju emphasised that the bond market is a “viable” option for generating finances for RE projects.
“We need to develop the bond market. When the bond market is available long term financing to the RE sector should be available. This is where I think the industry needs to see how we can actually develop the bond market.”
“We are going to have huge potential from the National Infrastructure Bank. We see how we can actually support new and/or downsell projects in the RE sector and also we can actually provide partial credit guarantee kind of a thing. We are looking at large number of innovative methods for supporting financing of RE.”
In his address at the same event, Minister of New & Renewable Energy Pralhad Joshi highlighted the need of higher RE financing to meet the expected rise in demand through renewable energy.
The Ministry is working towards ironing out the bottlenecks in the RE sector by engaging more with stakeholders, and in this regard, MNRE will hold further consultations, he added.
Joshi noted that India has now overtaken Brazil to become the third-largest renewable energy market globally.
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