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Renewables investment trends in India since the COVID-19 onset

August 04, 2021
Vibhuti Garg and Saurabh Trivedi
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Key Findings

As the COVID-19 pandemic hit the world in 2020, governments responded with a range of massive fiscal stimulus packages to ease the economic distress caused by lockdowns.

The restrictions on the movement of people and goods to curb the spread of the virus depressed global energy demand which in turn slowed investment in the renewable energy (RE) sector.

Investment in RE in India declined by 24% in the financial year (FY) 2020/21, dropping from US$8.4bn in 2019/20 to US$6.4bn in 2020/21. However, with the revival of energy demand and commitments from various banks and financial institutions to exit fossil fuel investments, the share of RE investment is rising. In the first four months of this financial year, from April to July 2021, investment in RE totalled US$6.6bn.

Executive Summary

To boost energy security and self-reliance, the government is making efforts to reduce reliance on oil and gas imports by looking at alternate clean energy technologies. In his Independence Day speech, Prime Minister Narendra Modi announced a National Hydrogen Mission4 that will help India become a global hub for green hydrogen production and exports.

India will need to deploy US$500bn in investment5 to reach its 450GW capacity target by 2030 (US$300bn for wind and solar infrastructure, US$50bn for grid firming investments, and US$150bn on expanding and modernising transmission).

To ascertain whether India can come close to meeting its ambitious targets, we explored India’s renewable energy investment trends during FY2020/21 and for the first four months of FY2021/22.

Vibhuti Garg

Vibhuti Garg is an energy economist and IEEFA Director, South Asia. Vibhuti’s focus is on promoting sustainable development through influencing policy intervention on energy pricing, adoption of new technologies, subsidy reforms, enhancing clean energy access, access to capital and private participation in various areas of the energy sector. 

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Saurabh Trivedi

Saurabh Trivedi is a research analyst with IEEFA. His focus is on analysing global investment flows into clean energy and fossil fuel sectors with a specific attention to debt investment. He also analyses the role of innovative sustainable finance investments in transitioning Indian fossil fuel companies to clean energy.

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