RE-Sector
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India’s efforts to expand the share of renewable energy in the electricity mix has received a major boost with as many as 30 banks and financial institutions recently committing to finance green energy projects of 70,505 MW total capacity for Rs.3,52,640 crore.

The commitments for financing green energy projects till 2021-22 were made by banks and financial institutions from both public as well as private sector at RE-Invest 2015, a renewable energy global investors meet and expo held in New Delhi from February 15-17.

Among public sector banks, State Bank of India committed Rs.75,000 crore for 15,000 MW renewable energy capacity.

The sector also received significant financing commitments from other public sector banks and financial institutions such as Indian Renewable Energy Development Agency Ltd (Rs.30,000 crore), India Infrastructure Finance Company Ltd (Rs.20,000 crore), IDBI Bank (Rs.14,700 crore), Power Finance Corporation (Rs.15,000 crore), Bank of Baroda (Rs.12,500 crore), Bank of India (Rs.10,000 crore), Union Bank of India (Rs.7,500 crore), Bank of Maharashtra (Rs.7,500 crore), Andhra Bank (Rs.5,000 crore), Punjab National Bank (Rs.2,500 crore), State Bank of Mysore (Rs.2,000 crore), Indian Overseas Bank (Rs.2,000 crore), Canara Bank (Rs.1,600 crore), State Bank of Travancore (Rs.1,250 crore), Indian Bank (Rs.1,100 crore), Dena Bank (Rs.1,000 crore), United Bank of India (Rs.1,000 crore), Vijaya Bank (Rs.1,000 crore), State Bank of Patiala (Rs.500 crore), Bharatiya Mahila Bank (Rs.250 crore) and Oriental Bank of Commerce (Rs.240 crore).

The private sector banks and financial institutions that gave commitments to finance renewable energy projects at the event included ICICI Bank (Rs.37,500 crore), L&T Finance Holdings Ltd (Rs.32,500 crore), PTC India Financial Services Ltd (Rs.30,000 crore), Yes Bank (Rs.25,000 crore), Axis Bank (Rs.10,000 crore), South Indian Bank (Rs.3,000 crore), HDFC Bank (Rs.2,000 crore) and Lakshmi Vilas Bank (Rs.1,000 crore).

Even though clean energy development is considered vital for a country’s economic growth, in India, securing affordable financing for renewable energy projects remains a major challenge. Owing to information gaps and also due to policy flaws such as sectoral lending limits, many domestic banks perceive financing of renewable energy projects to be risky.

India’s total renewable power installed capacity as on December 31, 2014, stood at 33.8 GW. The renewable energy sector in the country is primarily driven by private companies. The government has been promoting private investment in renewable energy through an attractive mix of fiscal and financial incentives, in addition to preferential tariffs that are provided at state level.

BANKS AND FIS THAT HAVE GIVEN GREEN ENERGY FINANCING COMMITMENTS AT RE-INVEST 2015

Bank/Financial Institution Capacity (MW) Amount (Rs. Crore)
State Bank of India 15,000 75,000
ICICI Bank 7,500 37,500
L&T Finance Holdings Ltd 6,500 32,500
IREDA 6,000 30,000
PTC Financial Services Ltd 6,000 30,000
Yes Bank 5,000 25,000
India Infrastructure Finance Co. Ltd 4,000 20,000
IDBI Bank 3,000 14,700
Power Finance Corporation 3,000 15,000
Bank of Baroda 2,500 12,500
Axis Bank 2,000 10,000
Bank of India 2,000 10,000
Union Bank of India 1,500 7,500
Bank of Maharashtra 1,500 7,500
Andhra Bank 1,000 5,000
South Indian Bank Ltd 600 3,000
HDFC Bank 400 2,000
Indian Overseas Bank 400 2,000
Punjab National Bank 500 2,500
Canara Bank 320 1,600
State Bank of Mysore 285 2,000
State Bank of Travancore 250 1,250
Indian Bank 220 1,100
Dena Bank 200 1,000
United Bank of India 200 1,000
Vijaya Bank 200 1,000
Lakshmi Vilas Bank 200 1,000
State Bank of Patiala 100 500
Oriental Bank of Commerce 80 240
Bharatiya Mahila Bank 50 250
Total 70,505 3,52,640

Source: Ministry of New and Renewable Energy


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