Renewable energy financing soars 63% in 2023, solar leads the charge

Funding for renewable energy projects in 2023 surged by 63 per cent compared to 2022 levels, reaching approximately Rs 30,255 crore ($3,663 million), according to a report by the Centre for Financial Accountability.

 

The report, titled ‘Coal vs RE Investment in 2024’ and released on Thursday, revealed a decline in project finance for coal power projects. However, corporate finance lending to coal power and mining companies totalled $3 billion.

 

Solar power projects dominated the renewable energy deals in 2023, accounting for 49 per cent of the total, followed by hybrid projects at 46 per cent and wind energy at 6 per cent.

 

In 2023, over 96 per cent of coal-linked company financing in India from commercial banks was facilitated through underwriting, with loans making up the remaining 4 per cent. US-based banks led the corporate financing to coal-linked companies, contributing 65 per cent of the total.

 

Key highlights:

  Renewable energy focus: For the third consecutive year, all project finance loans in 2023 supported renewable energy, funding 8.77 GW of capacity.

 

Non-fossil fuel goal: India achieved 188 GW of non-fossil fuel capacity in 2023 but remains off-track to meet its 500 GW target by 2030.

 

Primary financing dominance: Primary financing accounted for 77 per cent of project deals, while refinancing comprised the remaining 23 per cent.

 

Solar leads: Solar power dominated with 49 per cent of deals, followed by hybrid projects at 46 per cent and wind projects at 6 per cent.

 

Bank contributions: Commercial banks provided 68 per cent of renewable energy loans, totalling Rs 20,625 crore ($2,497 million).

 

Regional lending: Gujarat received 25 per cent of the financed capacity, amounting to Rs 9,857 crore ($1,193 million), followed by Karnataka with Rs 4,593 crore ($556 million).