New Delhi: A financial assessment on Friday revealed a massive 90 per cent decline in coal power investment in India in 2018 compared to the previous year.
The report looks at coal and renewable energy project finance made in 2018 and compares that with the numbers in 2017.
"Coal vs Renewables 2018" -- an annual energy investment trend report -- recorded a significant drop in lending to coal power projects compared to the lending received in 2017.
The report by the Delhi based financial institute Centre for Financial Analysis analysed project finance lending to 54 energy projects that reached financial close in 2018.
According to the report, of all energy project finance profiled in the study, 80 per cent went to renewables while coal received 20 per cent.
Compared to 2017, 2018 saw a 90 per cent decline in lending to coal-fired power plants.
In 2018, only five coal power projects with a combined capacity of 3.8 gigawatt (GW) received finance totalling Rs 6,081 crore ($850 million).
By contrast, 12 coal-fired projects in 2017, with a combined capacity of 17 GW, received Rs 60,767 crore ($9.35 billion).
Similar trends were seen last year between public vs private banks and financial institutions, said the report.
Coal power project funding still dominates most of financial lending from public banks and a majority government owned financial institutions, whereas private banks and institutions continue to bet big on renewable energy (Rs 18,263 crore or $2.64 billion).
Of the total lending to coal power projects (Rs 6,081 crore/$850 million), Rs 3,938 crore ($559 million) came from majority government-owned financial institutions.
Whereas of the total lending to renewable power projects (Rs 24,442 crore/$3.55 billion), Rs 18,263 crore ($2.64 billion) came from majority privately-owned commercial banks. This trend is consistent with findings from 2017.
In 2018, some states clearly paved the pathway for renewable projects.
Projects in Karnataka, Madhya Pradesh and Gujarat attracted half of the entire country's project finance for renewables across 23 solar PV and wind projects.
As against these, Chhattisgarh and West Bengal together attracted project finance for three coal-fired power projects but no renewables.
Joe Athialy, Executive Director with the Centre for Financial Accountability, said: "Our analysis shows that investments in coal power are reducing at a significant pace, this trend consistent with global market forces."
"However, it is important to note that private banks are the ones leading the transition to clean energy in India and not the government-owned financial institutions or public banks. Government needs to get the public banks and financial institutions to start backing renewable energy more than coal," he added.