New Delhi, Jun 13 (KNN) India's ambitious target of reaching 500 gigawatts (GW) of installed renewable energy capacity by 2030 will necessitate significant capital investment over the next seven years, according to projections from the prominent ratings agency Moody's Investors Service.

Moody's calculates that between USD 190 billion and USD 215 billion must be directed towards renewable energy projects to achieve this goal.

Additionally, the agency estimates USD 150 billion to USD 170 billion in funding will be required for complementary infrastructure like electricity transmission, distribution networks, and energy storage solutions.

As of March 31st, 2024, India's total renewable energy capacity stood at 144 GW, inclusive of large hydroelectric power plants.

Industry experts widely anticipate that the policy emphasis on renewable energy will continue under Prime Minister Narendra Modi's recently commenced third term in office.

To remain on track for the 2030 target, India must add approximately 50 GW of new renewable energy capacity annually over the next five years beginning in 2024 – a formidable escalation from the country's current peak of 15 GW installed within a single year.

In a media briefing on June 12th, Moody's stated its view that infrastructure companies will increase spending on energy transition projects to meet rising demand.

However, supportive government policies and stable regulatory frameworks should help underpin credit quality within the sector.

The ratings agency highlighted India's success in growing the share of renewable sources within its overall power capacity mix to around 43 per cent in the fiscal years 2023 and 2024, enabled by robust policy support from authorities.

While flagging potential modest impacts to infrastructure lending from the Reserve Bank of India's new loan provisioning rules, Moody's assessed that companies executing large-scale energy and infrastructure projects possess the financial flexibility to absorb rising borrowing costs.

Moody's subsidiary ICRA forecasts that the government will maintain a sharp focus on road infrastructure investments by increasing capital outlays.

ICRA projects India's road construction activity will likely grow 5-8 per cent to between 12,500-13,000 kilometers in fiscal 2025, following robust expansion of around 20 per cent in the prior fiscal year.

(KNN Bureau)