India committed to meeting energy demands

So far this year, India has topped Asian project financing (PF) with 55.6% ($12.1bn) of the total $21.8bn volume. As the country continues to develop, it faces an increasing demand for electricity, which has driven up PF volume. To meet these requirements, India has been very active in adapting new technologies, thus increasing its capability to generate renewable electricity. The government has also set a target to provide 40% of all electricity from renewable sources by 2030.

Renewable energy projects favored over coal

A total 1,917MW of wind farms ($1.6bn), 1,746MW of solar ($1.7bn), and 1,296MW of hydro projects ($582m) reached financial close in 2017 YTD. Additionally, 55.5% of Indian PF signed so far this year has supported energy projects. Within Indian energy PF signed in 2017 YTD, 16.2% funded 971MW of new wind projects ($1.1bn), 9.8% funded 780MW of new solar projects ($662m), and 2.6% funded 96MW of new hydroelectric capacity ($177m) —while only 7.1% supported greenfield coal-based projects ($475m). Even though coal capacity of new PF so far this year reached 2,640MW, which is still quite high, such projects showed a significant decrease compared to deals reaching financial close in 2016 YTD.

Renewable energy driving the global power agenda

Despite the fact that Asia’s largest project this year was the $3.4bn expansion of the Tanjung Jati B Coal-fired Power Plant in Indonesia, renewables have been gaining momentumin the region with its share of energy PF volume growing to 45.8% in 2017 YTD from 37.6% in 2016 YTD. Renewables have also seen growth beyond Asia. For example, renewables’ share of all energy PF in EMEA increased to 90.0% in 2017 YTD from 62.4% in 2016 YTD, primarily driven by Western Europe, while the share in Latin America increased to 69.6% from 44.1% over the same period.

Data source: Dealogic, as of May 29, 2017