Ind-Ra Retains Steady Sector Outlook for Solar and Wind Power Sectors

The research agency has also reviewed the rating outlook for the solar sector to stable (from positive) while sustaining stable rating outlook for the wind sector

September 19, 2019. By News Bureau

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India Ratings & Research (Ind-Ra) has retained a steady outlook for wind and solar power sectors for the enduring part of financial year 2019-20 (FY20).

"The stable outlook emanates from likely in-line operational and financial performance of projects with Ind-Ra’s projection for the rest of FY20, coupled with the availability of adequate liquidity," said Ind-Ra in a press release.

The research agency has also reviewed the rating outlook for solar sector to stable (from positive), while sustaining stable rating outlook for the wind sector.

The agency reasoned the modification in rating outlook for solar due to rising renegotiation fears and sustained delay in payments from some of the offtakers.

There were 25 per cent more downgrades than upgrades among renewable projects in Ind-Ra’s portfolio in 2019, till mid-August, mostly on account of delay in payments from the offtaker.

Though, timely payments from strong counterparties such as Solar Energy Corporation of India, NTPC and expected stable generation of renewable energy power in the upcoming months favoured the stable outlook.

According to the release, Ministry of Power’s efforts to impose letter of credits as a payment security mechanism under PPAs can have a salutary effect on timely payments from offtakers over the long-term.

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