Over 90% of India’s green energy projects got investment-grade ratings of BBB and above in 2020, according to a study by CEEW Centre for Energy Finance (CEEW-CEF).
“This is due to the significantly improved financial viability of India’s renewable energy projects over the last decade on account of favourable policy support from the central government. As recently as 2015, less than 50 per cent of the projects in the sector enjoyed such favourable ratings from credit rating agencies on their debt issuances,” CEEW-CEF said in a statement.
This comes in the backdrop of India’s non-fossil fuel-based capacity meeting the 40% target under its nationally determined contribution (NDC) at COP 21.
“The CEEW-CEF study, supported by Shakti Sustainable Energy Foundation, also highlighted that out of the 90 renewable energy projects evaluated by three credit rating agencies in 2020 and considered in the report, only 6 wind energy projects had below-investment-grade ratings,” the statement added.
According to the government, installed power capacity from non-fossil fuels will go up to 66% by 2030. Also, India has already reached an emission reduction of 28%.
“Of the 44 solar projects evaluated, 26 enjoyed an ‘A’ rating while 9 of them were rated as ‘AA’ - indicating an extremely low probability of default. Further, 5 solar projects received BBB ratings on their debt issuances. Similarly, of the 46 wind energy projects evaluated, 30 projects received an ‘A’ rating, while another 10 projects were given ‘BBB’ rating by the credit rating firms,” the statement said.
India recently announced to cut net carbon emissions to zero by 2070 at COP26 in Glasgow. According to the Central Electricity Authority, by 2030, the country’s power requirement would be 817GW, more than half of which would be clean energy, and 280GW would be from solar energy alone.
“The study found that the government's decision to introduce Solar Energy Corporation of India Ltd (SECI) as an intermediary to buy power from solar projects in 2017, has had a very positive impact. Tariffs declined by 24 per cent, over the next eighteen months solely on account of this policy decision,” the statement added.
