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At ₹2,797 crore, State’s share second highest; nil funding for coal-based projects

Tamil Nadu is among the States which saw significant lending to renewable energy projects and nil lending to coal projects in 2017, according to a report by the Center for Financial Accountability (CFA).

The report titled Coal vs Renewables Finance Analysis said only 12 of India’s 29 States attracted renewable energy project financing in 2017. Out of the 12, five States – Andhra Pradesh, Telangana, Tamil Nadu, Karnataka and Rajasthan – attracted three-quarters of the total lending of ₹22,913 crore to the sector, it said.

As per the report, Tamil Nadu attracted funding of ₹2,797 crore for renewable energy projects. Karnataka, Punjab, Tamil Nadu and Telangana had no lending for coal projects in 2017, it said. The nil coal funding also means that no project sought refinancing in 2017. Telangana attracted ₹4,076 crore, Karnataka attracted ₹1,981 crore and Punjab attracted ₹473 crore in renewable energy financing respectively.

According to a recent policy note of Tamil Nadu’s energy department, the State had a total installed renewable energy capacity of 11,113 MW as of March 31, 2018.

Out of this, wind accounted for about 8,152 MW and solar accounted for 2,034 MW.

A model for others

The State has harnessed around 13,000 million units of wind energy and 2,905 million units of solar energy during 2017-18, it added. The State has plans to enhance its renewable energy capacity and recently got approval to procure 1,500 MW each of wind and solar power.

A recent report by the Institute for Energy Economics and Financial Analysis said Tamil Nadu’s ability to rapidly shift to lower cost, zero emission generation sources could serve as a model for many emerging markets internationally.

An earlier CFA study titled Coal Currency showed that about 7,01,820 MW of coal and gas plants were waiting to be built in India, with coal-based plants projected to account for 85%. More than half of the capacity is to be located in Andhra Pradesh, Maharashtra, Madhya Pradesh, Gujarat and Tamil Nadu.

The CFA said that in 2017, coal projects across the country received total funding of ₹60,767 crore, with the State-owned banks lending more to coal projects.

However, private financial companies invested more in renewable energy projects, it added.

The article, first published in The Hindu, can be accessed here.

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