Almost thirty Indian banks and FIs have so far dedicated to finance 70.505 GW of green energy, accounting to ₹3526.40 billion by 2021-22.
At the RE-INVEST 2015 summit, Indian government has asked banks to set lending targets for renewable energy projects over the next five years, as reported by CleanTechnica.
In addition to this, 213 companies also expressed their willingness to establish 266 GW of clean energy portfolio over the next five years.
Besides, the targets set by Public sector banks amounts to ₹1707 billion.
Lately, more and more Indian banks and financial institutions (FIs) are showing interest to invest in clean energy assets including biomass, small hydro, solar and wind energy.
Citigroup had recently announced plans to lend, invest, and facilitate environment friendly projects worth $100 billion by 2025.
State Bank of India, has committed to provide ₹750 billion ($12.5 billion) in debt funding for 15GW of renewable energy projects.
In addition, ICICI Bank and Yes Bank will finance 12.5 GW of renewable projects.
Recently, the bank loans have reached up to 13-14 percent in a limited tenure of 10-12 years at a conservative debt equity ratio of 70:30.
Moreover, the central bank (Reserve Bank of India) aims to revise its priority sector lending (PSL) guidelines for banks, so that renewable energy projects come under the ambit of priority financing.
However, the banks and FIs are concerned about the bankability of projects due to bad grid infrastructure and poor financial health of the Discoms.
Power Grid Corporation of India has been entrusted to implement Green Energy Corridor Project for evacuation of renewable energy from generation points to the actual points of consumption.
The project developers and MNRE have been exploring foreign venues including the German KfW, US Export-Import Bank, Asian Development Bank and the International Finance Corporation.
Sabeena Wahid
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