CHENNAI: Indian renewable energy developers have sharply ramped up fundraising via the issuance of green bonds in the international markets, with as much as Rs 26,300 crore raised through this route in the first half of this calendar year alone.
According to a report from the Council on Energy, Environment and Water’s Centre for Energy Finance (CEEW-CEF), this route has seen significant increase in preference during the past few quarters. Indian developers have raised a cumulative Rs 78,200 crore since 2014 through green bonds, with two companies—Greenko and ReNew Power—accounting for nearly 70% of all issuances by value.
Proceeds from capital raised through these bonds since 2014 have directly refinanced debt for over 10 GW worth of Indian RE projects. While wind and solar power projects comprise 42% each, hydropower makes up the rest.
The quantum of funds raised have only accelerated during the current year. “Indian renewable energy (RE) developers have issued green bonds worth $3.6 billion in the first half of 2021 alone, beating even previous one-year records,” a statement from the CEEW-CEF said.
Such funds have excited substantial market interest, the authors of the study noted, with an average oversubscription of 360%. Asian investors, for instance, have shown significant appetite for such bonds, picking up nearly 50% of these bonds. However, the market remains nascent in India, with only eight developers having accessed the international bond markets as of June 2021.
Of this portfolio of RE projects that have hit the bond market, over 60% are tied to state-run utilities. The report notes that developers in such cases were mitigating payment delay risks by diversifying portfolios.
Gagan Sidhu, Director, CEEW-CEF, and co-author of the study noted that while India’s non-hydel RE capacity portfolio has crossed the 100 GW mark, “(India) needs to significantly ramp up capital mobilisation to get to 450 GW by 2030”.