In March 2023, India announced a bidding trajectory for renewable energy (RE), which envisages bid issuance of 50 GW per year for five years commencing FY 24. This is more than 2x the capacity that has been auctioned in recent years. As RE projects are often ~75% debt financed, lenders such as IREDA will need to significantly enhance the scale of their operations if bid issuance is to translate into incremental on-the-ground RE capacity addition.
While auctions for RE capacity have picked up pace in Q1 of FY 24, they remain slightly below the average of 12.5GW per quarter rate that annual bids of 50GW per year translate into. Will we see a further pick up in the pace of auctions flowing from the enhanced bidding trajectory in the coming quarters?