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Green Energy Projects in India preferred by Debt Syndicators over Thermal Power

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Green Energy Projects in India have become more preferred for debt lenders than the conventional thermal power projects.See below for the problems besetting India’s thermal power project developers.  Note wind and solar power projects are seeing more interest from debt  syndication lenders like IDFC, IL&FS because of the following reasons

a) Strong support from state and federal governments which are going all out to support Renewable Energy through tax breaks,feed in tariffs,capital subsidy

b) Secure Power Purchase Agreements (PPA) by NVVN at even higher prices for green energy

c) No problems of fuel supply availability that plagues the coal and gas power plants in India

d) Lesser Environmental issues that beset the Coal Power and Nuclear Power Plants in India with local agitations

e) Land Acquisitions problems are also lower as solar and wind power plants don’t require prime land

Green Companies in India  are increasing rapidly in all sectors like Solar Energy, Wind Power etc taking advantage of India’s massive energy deficit.

India’s Power Industry Woes

India’s Power Industry is in the most severe crisis since the sector was reformed and private power sector companies were allowed. India’s electricity companies which were considered as a great investment with fancied valuations have now found the going tough.  A number of factors have converged to make the electricity industry go into the crisis mode. India faces a dark 2012 summer as the energy demand remains high and growing while power plants remain stuck due to absence of fuel and remunerative prices.  ith the Indian banks also looking at debt defaults, the government is trying to come up with a new plan.

India faces a Long and Dark Summer in 2012 with its Electricity Industry in Shambles. The list of woes is almost non-ending and the government is the biggest culprit.Locked in a policy paralysis due to its corruption taint,the authorities have failed to move.Indian Electricity Companies too are facing losses and may even default on some project debt. The state distribution companies already have racked up billion of dollar in losses due to total mismanagement of  tariffs and power theft. So the whole supply chain is in trouble with the Indian Banks also in trouble as they have lent billions to the power producers.

India is one of the biggest electricity consumers in the country.Despite massive demand,the supply is not coming up as the power plants are locked in litigation and protests by locals as well.Land acquisition has been a point of concern leading to deaths. Nuclear Power  Plants in Tamil Nadu and Maharashtra are not being built due to Fukushima dangers. Hydro Power Plants too face problems as people are concerned about the environmental impact. Coal India the monopoly producer has nto managed to meet targets.It keeps raising prices and lowering production while imported coal makes the electricity generated too costly to be sold.


Sneha Shah

I am Sneha, the Editor-in-chief for the Blog. We would be glad to receive suggestions, inputs & comments on GWI from you guys to keep it going! You can contact me for consultancy/trade inquires by writing an email to

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