November 24, 2020: The third annual Coal vs Renewable Financial Analysis 2019 marks a second consecutive year on year decline in coal funding following a 90% decrease in 2018. The report finds a 126% drop in funding from commercial banks to coal compared to 2018. There has also been a significant drop in state-owned financing of coal projects. Lending to renewable energy projects saw a minor contraction of 6% YoY although it received 95% of the total lending to energy projects.

The report, prepared by Centre for Financial Accountability (CFA) and Climate Trends, looked at 50 project finance loans across 43 coal-fired and renewable energy projects in India. Only projects that reached financial close between 1st January 2019 and 31st December 2019 were included in the analysis.

“A significant drop in project finance to coal means that financial institutes are beginning to realise the associated financial and reputational risk in investing in coal” said Joe Athialy, Executive Director at CFA. “Our policy makers need to read the writing on the wall. Pushing healthy commercial banks into financing unviable coal projects in India and abroad will only lead to more stress in the financial sector” Athialy added.

2019 saw two coal projects (total capacity of 3.06GW) receiving ₹1100cr (US$190mn) in project finance. In 2018, five coal-fired projects with a combined capacity of 3.8GW received ₹6081cr (US$850mn). By contrast, ₹60,767cr (US$9.35bn) was lent to 17GW of coal projects in 2017.

Of the total lending to coal in 2019, ₹700cr went towards refinancing of JSW Energy’s Barmer power plant in Rajasthan. The Barmer project was also refinanced in 2018. Refinancing of projects almost always happens to change term conditions such as interest rates or maturity date. JSW Energy is among the progressive private power generation companies that announced a moratorium on construction of new coal power plants and focus on expanding their renewable energy portfolio[1].

The remaining ₹400cr (US$91mn) went towards financing NTPC’s new coal project in Barh, Bihar. The project’s engineering, procurement and construction responsibilities have been awarded to Doosan Heavy Industries[2]. NTPC, India’s largest coal power operator, recently announced a moratorium on construction new greenfield coal power plants[3].

“In addition to private and publicly owned coal power companies, heavily industrialised states like Gujarat[4] and Maharashtra[5] have also announced a no new coal policy. These policies are being announced due to the coal overcapacity problem as well as plummeting cost of renewables. And it is clearly in the interest of India’s economic stability and developmental needs” added Aarti Khosla, Director, Climate Trends.

41 renewable energy projects (total capacity of 5.15GW) received a cumulative of ₹22,971cr (US$3220mn). Lending to wind energy dropped 30%, while lending to solar increased by 10% compared to 2018. Solar dominated project finance loans to renewable energy in 2017, 2018, and 2019. However, due to the financial stress in India’s power distribution companies (Discoms), investment in the renewable energy sector has been impacted. Discoms owe generation companies ₹116,340cr (US$16bn) of which US$1.1bn is owed to the renewable energy generators.

“While India is on track to achieve its Paris climate commitments, its ambitious domestic target of 450GW by 2030 might suffer if the financial condition of its discoms don’t improve. Phasing out old, inefficient, and expensive coal power plants and replacing them with renewable energy might be a way to reduce the financial stress within the sector” Aarti Khosla added.

According to recent reports, shutting down coal plants that are 20 years or older could save up to ₹53,000cr (US$7.2bn) over five years for various discoms[6].

Coal vs Renewables — Financial Analysis India- 2019

– – – – END – – – –

About Centre for Financial Accountability (CFA): CFA is a Delhi based research and campaign organisation that focuses on transparency and accountability of national and international financial institutions, with a specific focus on energy and infrastructure sectors.

About Climate Trends: Climate Trends is a Delhi based data driven strategic communications initiative that works towards building awareness around climate crisis and solutions. We focus on building understanding of the public and media on themes of climate change and energy transition.

For more information:

Madhulika Verma, Communications,, +91 9971137736

Mir Jalal, Communications,, +91 95821 68258







Your email address will not be published. Required fields are marked *