Green Energy Push Psbs Agree To Lend Rs 1 71 Lakh Crore To Finance Projects Over The Next 5 Years

MUMBAI: State-owned banks will actively promote green energy - considered vital for power-starved India - and have assured the finance ministry to provide around Rs 1.71 lakh crore to the sector in project financing over the next five years. This will help generate 34,000 megawatts of nonconventional power like wind and solar energy in this period. Banking behemoth State Bank of India has taken the lead with a Rs 75,000-crore commitment, aimed at generating 15,000 megawatt of green power, followed by IDBI Bank, which committed Rs 14,700 crore with 2,940 megawatt, people familiar with the matter told ET.

SBI chairman Arundhati Bhattacharya confirmed the development, saying that green energy lending would be a relatively safer asset, and this will spur the country's growth.

Banking exposure to the power sector is 9% of the total industry loans, or about Rs 5.5 lakh crore, data from RBI show. According a market estimates, renewable energy capacity installed makes up for 15% of the total capacity installed in India. Thus, the estimated bank lending to renewable energy is at 1-1.5% of the total banking system loans.

"The Indian banking sector's current low-to-moderate level exposure to green energy projects could increase sharply over the medium-term, given the rising importance of clean energy in today's world, and the government's emphasis on it," said Karthik Srinivasan, senior vicepresident, Icra, a rating company.

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Reference: bio-energy-today.blogspot.com