Investment in renewable energy in India reached a record $14.5 billion in the last fiscal (2021-22), an increase of 125 percent compared to FY2020-21, a new report by the Institute for Energy Economics and Financial Analysis (IEEFA) said on Thursday.
“After falling by 24 percent from $8.4 billion in FY2019-20 to $6.4 billion in FY2020-21 when the Covid pandemic curbed electricity demand, investment in renewable energy has made a strong comeback,” said the report’s author Vibhuti Garg, Energy Economist and Lead India, IEEFA.
The majority of the money flowed through acquisitions, which accounted for 42 percent of the total investment in FY2021-22. Most other big deals were packaged as bonds, debt equity investment and mezzanine funding.
The largest deal was SB Energy’s exit from the Indian renewables sector with a sale of assets worth $3.5 billion to Adani Green Energy.
The other key deals included Reliance New Energy Solar’s acquisition of REC Solar holding assets and a host of companies like Vector Green, AGEL, ReNew Power, Indian Railway Finance Corporation and Azure Power, raising money in the bonds market.
India added 15.5 gigawatt (GW) of renewable energy capacity in FY2021-22, which brought the total installed renewable capacity (excluding large hydro) to 110 GW as of March 2022 — a long way off the target of 175 GW of renewable energy capacity by the end of this year.
Renewable capacity will have to expand at a much faster rate to reach the target of 450 GW by 2030.
The Indian renewable energy sector needs about $30-$40 billion annually to meet the 450 GW target. This would require a more than doubling of the current level of investment, Vibhuti Garg said.