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Decoupling renewable energy from the conventional power sector may extend lending from bank

Share of Renewable energy mix in total power capacity is increasing rapidly, these additions seek more funding into the sector from NBFC. After NBFC crisis lending to the sector has came to standstill and financial institutions have said no to extend credit to power sector overall. Most of the NPAs are from thermal projects due to which renewable energy projects are suffering from funding risk. Low levels of lending in the sector from past 2 years has slowed pace of project implementation.

Post corona virus the sector would need much funding support, so it is high time to unshackle the renewable sector from the larger fossil fuel sector so the industry can realize its full potential without the caps and limitations. And it will happen after decoupling renewable energy from the conventional power sector. Renewable energy sector, is one of the most promising sectors for lenders to enhance their loan book size. A separate renewable sector would enable more sector lendings and would also cater to the need of achieving solar installation of 100 GW by 2020.