The COVID-19 pandemic has brought the wheels of the Indian economy to a screeching halt and as a result the post-crisis financing of new renewable energy (RE) projects would be a challenge.
According to industry players, investors across both debt and equity will become highly selective while financing projects due to uncertainty in the environment. They said that arranging capital, especially the debt capital, would be a challenge in the short-term post-COVID for RE projects.
“Despite the government interventions and support in the form of repayment moratorium, there remains a severe funding and liquidity crunch in India, the renewables sector under construction projects may see delayed financial closures which is likely to worsen in case the COVID-19 crisis deepens further,” said Sunil Jain, chief executive officer (CEO), Hero Future Energies (HFE).
He added that liquidity remains a constraint and the interest rates over the last one year are not moving fast enough as compared to the Reserve Bank of India (RBI) reductions.