Reserve Bank of India (RBI) rules require that a minimum of 75 per cent of non-banking financial companies – infrastructure finance company (NBFC-IFC) assets be deployed in infrastructure loans. As an NBFC-IFC, Indian Renewable Energy Development Agency (IREDA) can take higher exposure to eligible infrastructure categories, such as electricity generation. This should ensure that IREDA remains focused on lending to segments such as renewable energy (RE), thereby better supporting India’s energy transition.
India’s erstwhile 450 GW RE target by 2030 required investments in generation totalling USD 200 billion between 2020 and 2030. Investments needed for the revised 500 GW non-fossil fuel capacity by 2030 target are comparable. The overall exposure of all domestic banks and NBFCs to the power sector is approximately USD 160 billion. Opening up the domestic bond market could help ease potential financing constraints.