Opportunities of Renewable Energy Financing in India

Abstract

This article examines the transformative journey of renewable energy financing in India from 2014 to 2024, highlighting the significant investments and strategic efforts undertaken to expand the sector. The future of renewable energy financing in India is crucial for sustainable development and achieving the country's ambitious climate goals. As one of the largest renewable energy markets globally, India boasts a renewable energy capacity of 191 GW at the end of FY 24. This growth, from 80 GW in FY 15, highlights significant advancements, particularly in solar power, which increased 22 times to 81.8 GW, and wind power, which reached 45.9 GW by March 2024. Financing has been key, with an estimated INR 5.9 to 6.1 Lakh Crores invested from 2014 to 2023, emphasizing the need for substantial financial support to meet the 2030 target of 500 GW non-fossil fuel electricity capacity. This article details the methodology used to calculate this funding, examines the current financing landscape dominated by bonds, NBFCs, and banks, and discusses the future outlook and challenges in scaling up investments. It underscores the pivotal role of IREDA as a leading financier in the sector, contributing to the nation’s green energy goals. The path to a sustainable and energy-secure future for India will be paved with innovative financial solutions, robust risk management, and strategic partnerships, essential for achieving ambitious net-zero emissions goals.