India’s Renewable Energy Funding Surges 63%, Hits Rs 30,255 Cr in 2023

Funding for renewable energy projects in India witnessed a significant 63% rise in 2023 compared to the previous year, reaching approximately Rs 30,255 crore ($3,663 million), according to a report released by the Centre for Financial Accountability.

The report, titled Coal vs RE Investment in 2024, highlighted a decline in project finance for coal power projects, though corporate financing for coal power and mining companies still totalled $3 billion.

Renewable Energy Takes the Lead

Solar power emerged as the dominant sector in renewable energy investments, accounting for 49% of the total funding in 2023. Hybrid projects followed closely with 46%, while wind energy projects secured 6% of the funding.

In a noteworthy shift, all project finance loans in 2023 supported renewable energy initiatives, funding an impressive 8.77 GW of new capacity.

Coal Financing Trends

For coal-linked companies, over 96% of financing in 2023 came from commercial banks via underwriting, with loans making up the remaining 4%. US-based banks led the corporate financing in this segment, contributing 65% of the total.

Progress Towards Renewable Energy Goals

India achieved 188 GW of non-fossil fuel capacity by the end of 2023. However, the country remains off-track to meet its ambitious target of 500 GW of non-fossil fuel capacity by 2030.

Financing Insights

• Primary Financing Dominance: Primary financing accounted for 77% of renewable energy project deals, while refinancing made up the remaining 23%.
• Bank Contributions: Commercial banks contributed 68% of renewable energy loans, amounting to Rs 20,625 crore ($2,497 million).
• Regional Focus: Gujarat led regional investments, receiving 25% of the financed capacity, valued at Rs 9,857 crore ($1,193 million). Karnataka followed with Rs 4,593 crore ($556 million).

The report underscores a growing shift towards renewable energy in India, driven by increased investments and policy support. However, significant efforts are required to achieve long-term sustainability goals, including the 2030 target.