A parliamentary panel has suggested that the government could ask banks and financial institutions to earmark a share of their investments in the renewable energy sector to meet the growing demand for funds in the sector.
The committee on energy, in its latest report, noted that India is targeting installation of 175 GW of renewable energy by 2022 and has committed to increase the renewable energy capacity to 500 GW by 2030.
But while the Union government has envisaged an additional investment of about ₹17 trillion and the country requires ₹1.5-2 trillion annual investment, the investments for several years have been in the range of ₹75,000 crore only, it stated.
“The ministry may explore the possibility of prescribing a Renewable Finance Obligation... for banks and financial institutions in order to make them invest a specific percentage of investment in renewable energy sector,” the panel suggested.
“Since green banks have emerged as an innovative tool for accelerating clean energy financing globally, the Government should explore setting up of a green bank system which can address the persisting finance-related challenges...” the panel’s report, submitted in Parliament, said. According to the data furnished by the government to the panel, Indian Renewable Energy Development Agency (IREDA), a specialised public sector financial institution, funded more than 2,800 renewable energy projects with loans worth ₹96,250 crore for adding more than 16,165 MW green power. “IREDA is constrained in meeting financing requirement of large capacity projects mainly because of exposure norms and its low capital base,” it added.