The Indian Ministry of New and Renewable Energy (MNRE) said that after its first flagship financing event RE-Invest 2015, a total of 71.2 billion INR ($1.07 billion) has been sanctioned, and 29.5 billion INR ($444 million) was disbursed by banks and non-banking financial companies (NBFCs) since February 2015 to renewable energy sector.
India organized its first Renewable Energy Global Investor Meet and Expo (RE-Invest 2015) in February last year, which saw over 283 GW of renewable energy commitments from stakeholders. At the same time, 40 major banks and NBFCs committed to provide debt funding to renewable energy projects to over 78.75 GW for five years. In addition, there was commitment of over 62 GW of manufacturing of renewable energy equipment in India.
The figures, which were published by MNRE on April 11, 2016, come from monthly status reports by banks and NBFCs to the ministry (submitted by March 21, 2016). The sanctioned loans make up 18.63% of the commitments made at RE-Invest.
Doubts if plans can be realized
However, clean energy consultancy Bridge to India says around 283 GW of private sector renewable investment commitments were made at Re-Invest last year. It points out that most developers prefer to bid for the projects first and arrange for the capital later. It wonders if all of them will be able to raise capital at current tariff levels and in time to meet the stringent deadlines. In a blog post on April 11, 2016, it said banks are 'extremely reluctant to commit debt for the recent aggressive bids'.
"Overall, Bridge to India is of the opinion that while annual capacity addition in the Indian solar sector will continue to go up over the next few years, actual capacity added will be much smaller than MNRE estimates of 12 GW and 15 GW for FY2017 and FY2018 respectively. We also expect tariffs to stabilize or even rise marginally from current levels to attract sufficient interest from the financing community."
India has a target of achieving 175 GW of renewable energy capacity by 2022 which will require an investment of $160 billion including equity of $40 billion, according to MNRE. This is apart from investment required for transmission and infrastructure upgrades to be able to actually utilize the generated clean energy.