India has achieved a significant milestone in renewable energy investments, recording a 63% surge in project finance flows in 2023 compared to 2022, according to a report by the Centre for Financial Accountability. The total project finance lending reached ₹30,255 crore (USD 3.66 billion), reflecting growing investor confidence in the country’s renewable energy sector.
The report, titled Coal vs Renewable Energy Investments in 2024, highlights a consistent rise in renewable energy project financing, with solar power projects dominating the landscape. In 2023, solar projects accounted for 49% of renewable energy deals, followed by hybrid projects at 46%, and wind energy at 6%. The growth in project finance for solar and wind power underscores the increasing commitment of investors towards sustainable energy solutions.
Despite this impressive growth in renewables, the report noted that no new financing was extended to coal-fired power projects for the third consecutive year. However, corporate financing for coal power and mining companies stood at USD 3 billion, with 96% of this financing facilitated through underwriting by commercial banks. Notably, banks based in the United States provided 65% of the corporate financing for coal-linked companies.
Commercial banks also played a pivotal role in supporting renewable energy, contributing 68% of the total renewable energy loans in 2023, amounting to ₹20,625 crore (USD 2.5 billion). Gujarat emerged as a leader in securing renewable energy financing, receiving 25% of the total capacity financing, equating to ₹9,857 crore (USD 1.19 billion). Karnataka followed with ₹4,593 crore (USD 556 million).
India has made remarkable progress in expanding its non-fossil fuel capacity, achieving 188 GW in 2023. Primary financing constituted 77% of project deals, with the remaining 23% attributed to refinancing. The country added approximately 15 GW of renewable energy capacity between April and November 2023, nearly doubling the 7.54 GW added during the same period in the previous year.
Union Minister Pralhad Joshi reaffirmed the government’s commitment to achieving 500 GW of non-fossil fuel-based capacity by 2030. Speaking at the Confederation of Indian Industry International Energy Conference and Exhibition, the minister noted that India’s total installed capacity in the non-fossil fuel energy sector had reached 214 GW, marking a 14% growth compared to the previous year. Notably, November 2024 alone saw the addition of 2.3 GW, a fourfold increase from the 566 MW added in November 2023.
This substantial progress highlights India’s ambitious transition to renewable energy and its potential to lead global efforts in sustainable energy development.
