Climate Trends and Centre for Financial Accountability (CFA) released the fifth edition of Coal vs Renewable Financial Analysis at Tuesday’s CFA annual energy finance conference, hosted in collaboration by IIT Madras. The total funding for new projects in 2021 was 60 percent lower than 2017 levels. However, it was revealed that no new project financing was available for coal-power projects for the first time in 2021.
Coal vs Renewables Financial Analysis 2022 identifies L&T Finance as the largest financier in project financing for renewable energy in 2021.
The year-on-year growth in financing for renewable energy projects has been 39% since 2020. RE must be used at 2.5 times the current rate to reach its 2030 targets of 450 GW installed.
“The writing is on the wall. Lending institutions are increasingly moving away from coal lending given the risks. After Federal Bank, the first commercial bank to have announced a coal exit policy, Sarvodaya Small Finance Bank has also announced an end to financing coal projects. This should signal to institutions who have either provided loans or underwriting services, or have shareholdings in coal companies to rethink their lending,” said Joe Athially, Executive Director, Centre for Financial Accountability.
L&T Finance, which invested Rs 4,214 crore in the sector, was the largest funder of the Rs 33,893 crore total spent on RE projects.
Gujarat and Rajasthan were the two top recipients of renewable energy loans, with Rs 22,187 crore and 4,025 crore respectively. They accounted for 77% of all renewable energy loans.
Some estimates suggest that India would require $10 trillion to reach Net Zero by 2070.
The recent announcement of the Sovereign Green Bond Framework was encouraging. For the fiscal year 2022-23, the green bond issue is US$2 Billion. This is a small amount compared to the financing India will ultimately need, but it signals India’s ambitions to increase renewable energy and decrease our carbon intensity,” Shivani Shah, Communications Strategist at Climate Trends, said.
