India weighs low-cost loans for renewable projects hit by power curbs, sources say

New Delhi: India is contemplating providing low-cost loans to renewable energy producers to remedy losses incurred due to insufficient transmission infrastructure, according to four industry sources. The South Asian country's power grid has struggled to keep up with the surge in green energy, particularly solar, which accounts for about 162 gigawatts, or nearly a third of its total power generation capacity, as per government statistics.

Industry sources revealed that Indian renewable energy developers have suffered a loss of roughly 45 billion rupees ($470.21 million) since February 2025, as inadequate infrastructure has impeded the transmission of clean power from states like Rajasthan and Gujarat to the national grid. In some instances, nearly 70%-80% of renewable energy projects were unable to feed into the grid, said one source.

The sources, who spoke under anonymity as they lacked authorization to speak publicly, suggested the federal power and finance ministries were exploring transmission charge relief for delayed renewable projects. The power ministry had not yet provided a response to a Reuters email inquiry. Government data indicates that India, the world's third-largest solar power generator, curtailed 14% (8,133 gigawatt hours) of solar power output between April and June.

The sources stated that the power ministry was deliberating low-interest loans with long tenures of seven to eight years to compensate producers, and that government officials were consulting energy developers to identify eligible projects for compensation. Sanjeev Aggarwal, founder and executive chairman of Hexa Climate, a renewable project developer, shared that his company had faced curtailments but declined to provide further details.

He emphasized the importance of lenders' confidence in future generation capacity when sizing debt, stating that frequent and uncompensated curtailments could lead to higher financing costs for projects. Rating agency ICRA estimates that around a third of India's newly commissioned 54.8 GW of clean energy capacity was evacuated through temporary transmission as of May 2026.