Finance

Coal project finance in the year 2019 stood at just INR 1100 crore (US$190 million), compared to renewable energy lending aggregating to INR 22,971 crore (US$3220 million).

A new report by Auroville Consulting highlights gaps and challenges existing today in financing rooftop solar based on its evaluation of the international lines of credit’s implementation at the state level (for Tamil Nadu), and the availability and accessibility of the financial support. 

An ambitious, INR146,000 crore, five-year expansion of a previous domestic industry spending program includes money to attract investment into the sustainable energy and transport technologies.

The clean energy major has raised investment from Finnish impact investor Finnfund in its public charging point operator business Fortum Charge and Drive India.

The Group’s renewable energy business (Adani Green Energy) has a market value of US$15.6 billion, which is 40% more than India’s largest thermal power generator NTPC—a company with 22 times as much capacity. The RE business is of serious global investor interest, but also materially exposed to the wider Group’s environmental, social and governance (ESG) standing. By committing to phased closure of coal plants, Adani Group could lower the risk to global capital access while aligning with the government’s vision for energy independence through fast-growing reliance on renewables.

Climate Policy Initiative and REConnect Energy have developed an innovative mechanism called Garuda to retire old, inefficient thermal plants with equivalent renewable capacity. The scheme proposes a blended tariff that would include the normal tariff for the new renewable energy plant plus the cost of decommissioning the old fossil fuel plant, while making the provision for green bonds to finance RE. 

Indian solar sector remained buoyant even amid Covid pandemic as 15.3 GW of solar capacity (including solar-wind hybrid) was sanctioned in the current year’s first half itself. However, returns expectations from equity investments rose from around 14% in the first half of 2019 to 16-17%, indicating heightened risk perceptions among investors.

India’s state-owned electricity distribution companies (Discoms) are in dire financial straits, as they owe some $16 billion to generators, according to the Institute for Energy Economics and Financial Analysis (IEEFA). Despite this, national PV auctions have been oversubscribed and are setting record low tariffs in the country, indicating strong interest from developers – if the Discom challenge can be overcome.

The latest addition takes Adani Green Energy’s operational renewable energy capacity to 2,850 MW, including 2353 MW under a joint venture with French oil and gas major Total.

The Indian Renewable Energy Development Agency provides loans for clean power and energy efficiency projects. Its gross income in the last fiscal year rose to INR2372 crore – around 17% growth over the previous year’s INR2022 crore.