For the first time, 100 percent of the value of the project finance loans identified last year went to renewable energy projects. This is a considerable increase compared to 2020, where renewable energy loans accounted for 74 percent.
This was revealed in the fifth edition of Coal Vs Renewable Financial Analysis authored by Climate Trends and Centre for Financial Accountability and was released at CFA’s annual energy finance conference hosted in collaboration with IIT Madras recently.
According to the research, over ₹33 crores went to clean energy projects and no new coal power projects received any project finance in 2021. “Of the total 33,893 crores that went to renewable energy projects, L&T Finance was noted as the largest financier in 2021 pouring ₹4,214 crores into the sector. Rajasthan followed by Gujarat were the top beneficiaries of renewable energy lending, with ₹22,187crore and 4,025 crores being poured into the states respectively. Collectively they accounted for 77 percent of all renewable energy loans,” the analysis stated.
The total funding for new energy projects last year has been 60 percent lower compared to 2017 levels. “Finance for renewable energy projects on the other hand has seen a 39 percent year-on-year increase from 2020. In order to meet its2030 targets of 450 GW installed capacity, clean energy will need to be deployed at 2.5 times the current rate,” researchers found.
Joe Athially, executive director of Centre for Financial Accountability said, “The writing is on the wall. 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.”
India would need $10 trillion to transition to Net Zero by 2070. “The sheer scale of climate finance needed to meet the country’s mitigation goals will require an all-hands-on-deck approach. The recent announcement of the sovereign green bond framework is encouraging. The green bond issue size is $2 billion for the fiscal year 2022-23. While this is dwarfed by the finance India will need ultimately, as such it signals India’s ambitions to expand renewable energy and reduce our carbon intensity,” said Shivani Shah, communications strategist at Climate Trends.
Original News Link
https://energy.economictimes.indiatimes.com/news/renewable/financiers-now-back-renewable-energy-projects-more-says-study/96053714
