New Delhi: Sharpened global investor interest and enabling regulations could result in the addition of 35 gigawatt (GW) of renewable capacity -- involving Rs 1.5 lakh crore of investments -- in the three years through financial year 2022-23 (FY23), according to CRISIL Ratings.
This would be a 35 per cent growth over the Rs 1.1 lakh crore invested in the past three financial years, it added.
“Global investments have risen from about 15 per cent of total capital investment in FY15-FY18 to about 50 per cent of total investments in FY18-FY20. Going forward, global investments and internal accruals can generate around half of the Rs 1.5 lakh crore investments required,” said Hetal Gandhi, director, CRISIL Research.
The ratings agency added that a push towards clean energy was driving the global investor interest in India’s renewable sector, as reflected in project tenders getting oversubscribed amid strong participation by global investors.
It said even during the COVID-19 pandemic, the ‘must-run’ status of projects had ensured continuous power offtake despite weak demand. Further, enablers such as extensions to under-construction projects helped developers deal with mobility constraints, supply hurdles, and labour shortages.
“A sagging economy and a weak financial sector may pose challenges to fund the credit requirement for this growth. However, with growing scale, the sector will churn out around 18 GW of fresh stabilised portfolio with top developers over the next three years that are amenable to refinancing. That means an aggregate debt capital of Rs 70,000 crore can be freed up to fund greenfield capacities,” said Ankit Hakhu, director, CRISIL Ratings.
According to CRISIL, this refinancing was supported by a positive credit bias due to improving confidence on performance of solar, which constituted over three-fourths of the target pool.
It added that continued investor thrust and an enabling regulation might double the capacity addition run-rate from the 6-8 GW projects set up annually in the past three financial years.