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|
|L&T Finance Holdings Ltd||6,500||32,500|
|PTC Financial Services Ltd||6,000||30,000|
|India Infrastructure Finance Co. Ltd||4,000||20,000|
|Power Finance Corporation||3,000||15,000|
|Bank of Baroda||2,500||12,500|
|Bank of India||2,000||10,000|
|Union Bank of India||1,500||7,500|
|Bank of Maharashtra||1,500||7,500|
|South Indian Bank Ltd||600||3,000|
|Indian Overseas Bank||400||2,000|
|Punjab National Bank||500||2,500|
|State Bank of Mysore||285||2,000|
|State Bank of Travancore||250||1,250|
|United Bank of India||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|
Source: Ministry of New and Renewable Energy