Key Takeaways
- • IREDA, India's state-run renewable energy lender, plans to partner with global banks, institutional investors and multilaterals to raise long-term green funding at competitive rates, according to executive director Tusarkanta Parida speaking at the Bharat Renewable Energy Summit.
- • Indian renewable developers currently face borrowing costs of about 11% to 12%, versus 2% to 3% in developed markets.
- • India estimates it needs $220 billion of investment over the next three years in renewables and transmission to reach 500 GW of non-fossil capacity by 2030.
- • India attracted about $64 billion of private clean energy investment between 2024 and 2026, including $6.2 billion from foreign investors.
- • Grid constraints and curtailment are eroding developer cash flows, raising borrowing costs and limiting access to fresh debt or equity, per ReNew Energy Global CFO Kailash Vaswani.
Summary
India's state-run Indian Renewable Energy Development Agency Ltd (IREDA) is seeking partnerships with global financial institutions to raise cheaper, long-term green funding for domestic companies, according to executive director Tusarkanta Parida, who spoke at the Bharat Renewable Energy Summit. Parida said the lender is looking to tie up with global banks, institutional investors and multilaterals for long-term funding partnerships aimed at raising more green finance at competitive rates. He declined to identify the institutions involved in the proposed partnerships, and said the goal is to make project finance easier.
The funding push addresses a long-standing cost problem. Renewable energy developers in India have complained about borrowing costs of roughly 11% to 12%, compared with financing costs of 2% to 3% in developed markets, according to Reuters. The gap is material for project economics in a market pursuing one of the world's largest renewable expansion programmes.
Government estimates put India's investment requirement at $220 billion over the next three years in renewable generation and related transmission infrastructure, needed to meet its target of 500 gigawatts of non-fossil fuel power capacity by 2030. The country attracted about $64 billion of private investment into clean energy between 2024 and 2026, including $6.2 billion in foreign investment.
Beyond cost of capital, developers face land acquisition hurdles and power curbs linked to inadequate transmission. The grid has struggled to keep pace with rapid capacity additions, prompting some developers to waste generated electricity or delay projects until transmission links are available. Kailash Vaswani, chief financial officer of ReNew Energy Global, said the resulting curtailment feeds directly into project finances: developers do not assume curtailment when planning projects, so lost generation reduces cash flow, makes debt service harder, raises borrowing costs and limits capacity to raise new debt or equity.
The funding push addresses a long-standing cost problem. Renewable energy developers in India have complained about borrowing costs of roughly 11% to 12%, compared with financing costs of 2% to 3% in developed markets, according to Reuters. The gap is material for project economics in a market pursuing one of the world's largest renewable expansion programmes.
Government estimates put India's investment requirement at $220 billion over the next three years in renewable generation and related transmission infrastructure, needed to meet its target of 500 gigawatts of non-fossil fuel power capacity by 2030. The country attracted about $64 billion of private investment into clean energy between 2024 and 2026, including $6.2 billion in foreign investment.
Beyond cost of capital, developers face land acquisition hurdles and power curbs linked to inadequate transmission. The grid has struggled to keep pace with rapid capacity additions, prompting some developers to waste generated electricity or delay projects until transmission links are available. Kailash Vaswani, chief financial officer of ReNew Energy Global, said the resulting curtailment feeds directly into project finances: developers do not assume curtailment when planning projects, so lost generation reduces cash flow, makes debt service harder, raises borrowing costs and limits capacity to raise new debt or equity.
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