Last Updated on June 20, 2018 by Admin
A new analysis of energy project lending by Centre for Financial Accountability (CFA) shows that majority of government owned banks and financial institutions continued to fund coal projects in 2017. The same analysis also reveals private financial companies are comparatively investing more in renewable energy (RE) projects compared to coal. The report finds that coal received ₹60,767 crores (US$9.35 billion) in lending whereas RE received ₹22,913 crores (US$3.50 billion).
This report identified and reviewed project finance lending to 72 energy projects, comprising coal-fired power stations and renewable energy generation facilities in India that reached financial close in 2017. These projects attracted total lending of ₹83,680 crores (US$12.85 billion).
Of the top 10 lenders to coal power projects, 8 were majority government owned banks that collectively gave close to ₹30,337 crores (USD 4.5 billion) in new and refinanced lending towards 12 coal power projects. These were Rural Electrification Corporation, SBI, IIFC, Bank of India, Bank of Baroda, Canara Bank, Punjab National Bank, and Power Finance Corporation.
Over 70% of lending for coal was refinancing of existing debt for projects that have already been built or are under construction. SBI, among other public banks, financed ₹11,360 crores ($1,755 million) towards coal power projects whereas for RE, it financed ₹2,162 crores ($323 million). In the financial year 2017, SBI wrote-off bad loans close to ₹20,339 crores ($3,019 million). The highest among all public sector banks .
In contrast to coal lending, half of the top 10 lenders to 60 renewable power projects (solar and wind) were commercial financial institutions such as L&T Finance Holdings, Yes Bank, IndusInd Bank, IDFC, PFS, as opposed to majority government-owned banks. 76% of RE project finance was primary finance and 24% was refinancing of existing project indicating a vast growth in new RE projects in 2017.