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Informist, Wednesday, Jan. 29, 2025

--Banking secy: Natl Infra bk has potential to support renewable energy cos 
--CONTEXT: Banking secy Nagaraju speaking at FICCI's energy transition event 
--Banking secy: PSU bks to spend INR 10 tln in 5 yr in renewable energy sector 

NEW DELHI - Public sector banks will loan INR 10 trillion to the renewable energy sector in the next five years, shouldering the growing sector's huge funding requirements, to the tune of INR 33 trillion, Department of Financial Services Secretary M. Nagaraju said Wednesday. 

While the banking sector intends to loan more, regulatory obligations put a ceiling to their lending to the sector, Nagaraju said at the Federation of Indian Chambers of Commerce & Industry's 3rd India Energy Transition Summit. "...and that is why the private sector should come forward and lend more," he said. 

Beyond bank lending, debt financing is a key mechanism to infuse money into the renewable energy sector, the financial services secretary added. However, India's "under-developed" bond market causes a hindrance. "If the bond market gets developed, long-term financing in the renewable energy sector will get operational," he said.

Nagaraju further said that the National Bank for Financing Infrastructure and Development had "huge potential" to increase lending to the renewable energy sector. "It is to be seen if NaBFID can finance the down-sell projects in the renewable sector," he said. It is a standard practice in the infrastructure financing space for banks to down-sell portions of large loan exposures. NaBDID has a history of handling such cases.

In his remarks, Nagaraju also said private players in the renewable sector need to allocate higher funds for research and development as companies now are hugely dependent on Chinese imports or "assembles" which are "reassembled" in India to promote renewable sector products. "We have to invest more and produce more to be self reliant, and promote Make in India", he said.  End

Reported by Priyasmita Dutta

Edited by Deepshikha Bhardwaj

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