Power Finance Corp., India’s largest state-run lender to electricity utilities, plans to more than double lending for renewable energy projects within a year as coal-fired plants become riskier investments.
The company’s approved loans to projects, particularly solar and wind plants, will increase to 15 billion rupees ($305 million), or 4 percent of the total in the next financial year, from 6.75 billion rupees, or just 1.2 percent in the year ending in March, Chairman Satnam Singh said. The company does not plan to increase its total loan outlays of 450 billion rupees in 2013, he said.
“Given that fossil fuel costs have gone up, investments in wind and solar are surging,” Singh said in an interview in New Delhi. “We’re not afraid to go at renewable in a big way where lending happens much faster, within six months.”
The company started a subsidiary, Power Finance Green Energy Ltd., in July to broaden its exposure to renewable energy projects. To date, Power Finance has approved almost 30 billion rupees to renewable projects, with 13.4 billion rupees in loans outstanding as of Dec. 30.
The balance and all future loans will be managed by the green energy unit in the new financial year, Singh said.
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