PARIS ALIGNMENT OF POWER SECTOR FINANCE FLOWS IN INDIA

The document examines India's power sector financing between 2013 and 2019, noting that while utility-scale renewables dominate tracked commitments, continued investment in coal-fired power creates significant misalignment with Paris Agreement temperature goals. It highlights the risk of stranded assets in the thermal sector and proposes innovative financial mechanisms, such as green bonds and foreign exchange hedges, to accelerate the energy transition.

• Between 2013 and 2019, tracked power sector finance commitments in India averaged USD 13.9 billion annually, with utility-scale renewable energy projects accounting for the largest share at 74 percent.
• Domestic finance is the primary driver of India's renewable energy deployment, representing an average of 74 percent of all tracked finance from 2013 to 2019, with corporates alone contributing 59 percent.
• Despite renewable growth, coal-fired power plants continue to receive funding; in 2019, a lower-bound estimate shows approximately 16 percent (USD 2.8 billion) of tracked power sector commitments funded coal-fired plant development.
• India's 2019 power sector investments are classified as 'Extremely Misaligned' with the Paris Agreement, as their carbon intensity exceeds levels estimated under the Current Policies Scenario, which corresponds to a temperature rise above 3.2°C.
• The Indian banking sector faces significant financial risk from the thermal generation sector, with estimated non-performing or stranded assets ranging between USD 40 billion and USD 60 billion.
• State-owned enterprises (SOEs) have become the dominant owners of newly commissioned coal capacity; 90 percent of coal-fired capacity commissioned between 2018 and 2021 was owned by SOEs, compared to 53 percent in the 2015–2017 period.
• Green bonds have emerged as a scalable tool for clean energy, with Indian corporates and financial institutions raising over USD 14.4 billion through these issuances since 2016.
• Innovative foreign exchange hedge solutions, such as the one developed by Deutsche Bank for Continuum Green Energy Ltd, help manage currency risks for USD-denominated green bonds where project revenues are in Indian rupees.
• There is a significant investment gap in transmission and distribution infrastructure, with an estimated annual requirement of USD 35 billion to USD 50 billion between 2020 and 2030 to maintain reliable access and support renewable integration.

APA

Meattle, C., & Jain, S. (2022). PARIS ALIGNMENT OF POWER SECTOR FINANCE FLOWS IN INDIA. Sustainable Energy for All. https://www.seforall.org/system/files/2022-06/India-power-finance-brief.pdf

Chicago

Meattle, Chavi, and Shreyans Jain. PARIS ALIGNMENT OF POWER SECTOR FINANCE FLOWS IN INDIA. Sustainable Energy for All, 2022. https://www.seforall.org/system/files/2022-06/India-power-finance-brief.pdf.

Wikipedia

{{cite report |last1=Meattle |first1=Chavi |last2=Jain |first2=Shreyans |title=PARIS ALIGNMENT OF POWER SECTOR FINANCE FLOWS IN INDIA |publisher=Sustainable Energy for All |date=March 2022 |url=https://www.seforall.org/system/files/2022-06/India-power-finance-brief.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{meattle2022paris, author = {Meattle, Chavi and Jain, Shreyans}, title = {{PARIS ALIGNMENT OF POWER SECTOR FINANCE FLOWS IN INDIA}}, institution = {Sustainable Energy for All}, year = {2022}, month = mar, url = {https://www.seforall.org/system/files/2022-06/India-power-finance-brief.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }