Clean energy projects in India received 74% or ₹24,380 crore of the total funds from financial institutions last year. Which means that Indian lenders have given more loans to renewable sources of energy than other fossil fuels for the 3rd year in a row, this is what makes it such a big deal.
For a third straight year in 2020, the Indian lenders loaned and invested more funds to clean energy projects than the coal-based ones. After the PM revealed aspirational goals for cutting emissions, a lot more is expected to be invested in the renewables sector in the coming years.
The New Delhi-based research organisations (Climate Trends and Centre for Financial Accountability) have reported that the clean energy-related projects received 74% of total funds from the financial institutions in 2020, which is ₹243.8 billion. Compared to the ₹229.71 billion clean energy project approvals of 2019, this is a 6% rise.
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ust 26% of the 2020 funds from the Indian lenders, which was 85.2 billion rupees, went to the coal-run plants. This makes it a slapping 86% slump in approvals for these plants from 2017, which is also in sync with the declining investments and loans for fossil fuel funded projects.
This plan has come into effect since the PM’s announcement of the net-zero emissions by 2070 goal at COP26. India’s 2030 target for the low-emission energy capacity was also raised by the PM, to 500 GW from 450 GW. They have planned to generate half this electricity from renewable energy sources.
Although lenders are favoring clean energy more, coal’s lending increased by 40% to ₹85.2 billion in 2020 after two continuous years of constant decline. The report, which analyzed project finances worth ₹329.97 billion, revealed that solar energy got most of the financing.
Despite it, renewable energy remains 40% of India’s current installed capacity, that is 392 GW, and coal forms 52%, according to the data released by the government.