Report, Energy News, ET EnergyWorld

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New Delhi: Commercial bank financing of coal projects fell 126% from 2018 to 2019, according to a recent report. He said commercial banks provided 950 crore rupees in coal loans.

While coal funding declined a further 82% in 2019. “This is the second consecutive year-over-year decline in coal funding, following a 90% drop in 2018,” added the report.

According to the report from the Center for Financial Accountability (CFA) and Climate Trends, there has also been a significant drop in public funding for coal projects while there was no government funding for coal in 2019, at the Exception of Rs 150 crore of EXIM. Bank.

“A significant drop in funding for coal projects means that financial institutions are starting to realize the financial and reputational risk associated with investing in coal. Pushing healthy commercial banks to finance unsustainable coal projects in India and abroad will only increase stress in the financial sector, ”said Joe Athialy, executive director of CFA.

According to the report, in 2019 two coal projects with a total capacity of 3.06 gigawatts (GW) received Rs 1,100 crore in project funding. While in 2018, five coal projects with a combined capacity of 3.8 GW received Rs 6,081 crore. While in 2017, Rs 60,767 crore was loaned to 17 GW of coal projects.

“Of the total coal loans in 2019, 700 crore rupees were spent on refinancing the JSW Energy power plant in Barmer in Rajasthan. The Barmer project was also refinanced in 2018. The remaining 400 crore rupees were used to finance NTPC’s new coal project in Barh, Bihar, ”he said.

According to recent reports, shutting down coal-fired power plants 20 years or older could save up to Rs 53,000 crore over five years for various issues.

Renewable energy:
According to the report, 41 renewable energy projects received a cumulative Rs 22,971 crore in 2019, and although they experienced a slight contraction of 6% year-on-year, renewables received 95% of the total. energy ready. projects.

“Solar PV accounted for 69% of this funding, while the remaining 31% went to wind projects. Wind energy loans fell 30%, while solar energy loans increased 10% from 2018. Renewable energy project finance loans dominated solar in 2017, 2018 and 2019, ”he said.

He added, however, that due to financial strains related to power outages in India, investments in the renewable energy sector had been affected. Discoms owes generation companies Rs 116,340 crore.

“Commercial banks have provided the majority of loans for renewable energy projects, disbursing Rs 12,887 crore. The majority of state-owned financial institutions accounted for 24% of these loans, ”the report says.

He added that Rajasthan, Andhra Pradesh, Karnataka, Gujarat and Madhya Pradesh remained the most attractive states for renewable energy projects, accounting for 79% of total renewable energy loans in 2019.

Methodology:
The report examined 50 project finance loans in 43 renewable energy and coal projects in India. Only projects that reached financial close between January 1, 2019 and December 31, 2019 were included in the analysis.


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