A report by the Delhi-based Centre for Financial Accountability (CFA), finds that coal received Rs 60,767 crore ($9.35 billion) in lending whereas renewable energy received only Rs 22,913 crore ($3.50 billion) from majority of state-owned banks and financial institutions in India.
PSU banks continued to fund coal projects in 2017 while private financial companies are investing comparatively more in renewable energy projects.
Of the top 10 lenders to coal power projects, eight were majority state-owned banks that collectively gave close to Rs 30,337 crore ($4.5 billion) in new and refinanced lending towards 12 coal power projects. These included Rural Electrification Corporation (REC), SBI, IIFC, Bank of India, Bank of Baroda, Canara Bank, Punjab National Bank, and Power Finance Corporation (PFC).
In contrast to coal lending, half of the top 10 lenders to 60 renewable power projects (solar and wind) were commercial financial institutions such as L&T Finance Holdings, Yes Bank, IndusInd Bank, IDFC, PFS, as opposed to majority state-owned banks.
Also, 76 per cent of renewable energy project finance was primary finance and 24 per cent was refinancing of existing projects, indicating a vast growth in new RE projects in 2017.
All the lending identified by CFA was concentrated in 14 states. In states like Gujarat, renewables lending outpaced coal lending more than four-fold. In most other states with both coal lending and renewable energy lending, coal lending was higher than renewable lending.
Chhattisgarh represented an extreme example, where coal-fired power projects attracted almost 10 times that of renewables projects in 2017.