Renewable energy projects are on top of the agenda of financiers because they have predictable cash flows and are less volatile. Yet lenders are wary of taking large exposures to the sector because of factors external to it.

       The pressure to re-negotiate contracts to reduce tariffs and the viability of power distribution companies are some of these. The Reserve Bank of India in September 2020 revised priority sector lending (PSL) norms to push financing for small projects in the sector, but this has not increased the loans substantially. Loans to renewable energy under PSL rose by ...