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Discoms weak financial health impacting investing ability of renewable companies

The fund crunch of renewable energy companies has been exacerbated by the shadow banking crisis, there is a huge liquidity crisis. Public sector banks are really wary of lending to renewable energy projects and only a few private banks are lending. Solar power developers are yet to be compensated for the goods and services tax (GST) and safeguard duty on imported cells and modules they paid on projects they won the projects before either of the taxes came into effect. Besides the tariff caps and pending payments, there are also abrupt policy changes that worry companies. Credit rating agency ICRA has also downgraded 1.9 GW of solar and wind projects, citing liquidity concerns caused by outstanding dues. Renewable companied woes about the payment delays by utilities have already impacted the ability of renewable energy companies to invest in growth. Government must moot over creating a robust mechanism to curb out Utilities inability to pay to solar & wind owners, in addition to making land acquisition easier and easing tariff caps. If it continues, they will find it hard to service their loans and some may even go insolvent. This shall also make investors to be reluctant in investing in India renewable energy segment, thus impacting government's ambitious target of 100 GWp of solar and wind by 2022.