Odisha Needs INR 1.1 Lakh Cr for Clean Energy Transition by FY36: IEEFA
Odisha will need around INR 1.1 lakh crore in investments in renewable energy, storage and transmission infrastructure over the next decade to support its clean energy transition, according to a report by the Institute for Energy Economics and Financial Analysis.
October 16, 2026. By Mrinmoy Dey
The report, titled Sustainable finance for a just transition in Odisha, estimates that the state will need to add about 10.7 GW of renewable energy capacity between FY26 and FY36. This is alongside 2.7 GW of pumped storage, 0.13 GW of battery storage, and intra-state transmission upgrades, based on the Resource Adequacy Report of the Central Electricity Authority.
The total estimated investment requirement is INR 1,09,980 crore, or nearly INR 1.1 lakh crore. Renewable energy accounts for 67 percent of this requirement, storage for 21 percent and grid infrastructure for 12 percent. Annual investment needs vary with the timing of capacity additions, peaking at approximately INR 20,827 crore in FY30.
“Odisha’s clean energy transition is both an investment challenge and an opportunity to strengthen the state’s long-term economic resilience. A coordinated financing approach can help match projects with appropriate sources of capital, mobilise private investment and support workers and communities affected by the shift away from fossil fuels,” said Gaurav Upadhyay, Lead Energy Specialist – Transition Finance, South Asia, IEEFA, and the author of the report.
The state has substantial untapped potential to close this gap. Odisha has an estimated 139.5 GW of solar potential, of which about 0.82 GW, or less than 1 percent, has been installed. It has 12.13 GW of wind potential and no grid-connected wind capacity yet. Hydropower has reached about 2.2 GW of an estimated 7.6 GW. With appropriate investment in generation, storage, and grid infrastructure, Odisha could also play a larger role in supplying renewable electricity to other states, noted the report.
At present, the state’s power system remains heavily coal dependent. Its finances are similarly linked to fossil fuels. In FY25, Odisha received an estimated INR 14,148 crore from coal and petroleum resources, equal to 13.1 percent of its own tax and non-tax revenue, down from 16.2 percent in FY23. The report finds that this decline does not only reflect growth in alternative revenue streams. It also reflects stagnation in overall fossil-fuel revenues and a sharp fall in coal-related receipts. Fossil-fuel-linked sectors also account for about a third of the state’s gross value added.
Financing needs extend well beyond the power sector, to industrial decarbonisation, green hydrogen, electric mobility, energy-efficient buildings, and just transition measures such as worker reskilling, mine closure and land restoration, and economic diversification in coal-dependent districts.
To meet these needs, the report proposes a three-pronged strategy: assess the full cost of transition across sectors; develop a sustainable finance framework that matches projects with suitable sources of capital; and establish a dedicated transition fund that pools government, multilateral, climate, and private finance to de-risk projects and support just transition priorities.
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