India to increase funding for renewable energy by 130%

The rising cost of coal has been a godsend for India’s renewable energy industry.

Power Finance Corporation, the largest state-run lender to electricity utilities, intends to raise its loans for renewable energy projects this year to US$305 million from US$132 million, a massive 130% increase.

Chairman Satnam Singh said that since fossil fuel costs have gone up, investments in wind and solar are surging. The company does not plan to increase its total loan outlays of US$9.2 billion in 2013, however.

“We’re not afraid to go at renewable in a big way where lending happens much faster, within six months,” he said.

India plans to spend more than US$300 billion to expand its electric power systems in an attempt to boost economic growth by 9% in 2017. A larger share of this investment might be for clean energy projects as lenders shun coal-fired conventional power projects due to rising costs.

The price of imported coal from Australia and Indonesia has jumped 28% in the last two years.

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