India’s strong commitment towards realising its energy transition goals, including installing 500 gigawatts (GW) of non-fossil fuel power capacity, is bearing fruits with annual foreign direct investment (FDI) in the sector rising by a whopping 700 per cent between FY21 and FY25.
The Council on Energy, Environment and Water’s Green Finance Centre’s (CEEW-GFC) latest annual edition of its market handbook, released on Tuesday, notes that share of renewable energy (RE) in India’s total FDI inflows rose from around 1 per cent in FY21 to about 8 per cent in FY25.
“The RE sector attracted $3.4 billion in FDI in first three quarters of FY25, nearly matching the total FDI inflows for the whole of FY24 ($3.7 billion). This growth in investment reflects the sector’s rising appeal to global investors,” it added.
“Post FY20, FDI in RE sector saw a steep increase, amounting to around $12 billion till FY25. RE share of total FDI is on a continuous upswing over the last 5 years, growing from a low of 1.3 per cent to 8.4 per cent in FY25,” CEEW said.
Compared to RE, FDI in the power sector saw a massive dip in Q3 FY25, amounting to around $125 million, it added.
Under the extant foreign direct investment (FDI) policy, FDI in the renewable or non-conventional energy (RE) and power sectors is permitted up to 100 per cent under the automatic route.
Gagan Sidhu, Director of CEEW-GFC pointed out that India’s energy transition is at a crossroads. RE has clearly emerged as the dominant source of capacity addition, along with around 42 GW of RE auctioned in FY25. Notably, 59 per cent of this capacity was auctioned under innovative formats like firm and dispatchable renewables (FDRE) and hybrids, helping address grid resilience concerns amid rising RE penetration.
“All of this has been supported by strong overseas interest in India’s RE sector. FDI inflows in the first three quarters of FY25 nearly matched the total for all of FY24,” he noted.
As per data from the Ministry of New & Renewable Energy (MNRE), total investments, including FDI, attracted by the sector—Solar, Wind, Small Hydro, Large Hydro, Nuclear and Bio—almost hit Rs 4 lakh crore in the last five years, ending 2024 calendar year.
Gujarat and Rajasthan, which cumulatively account for more than one-third of India’s installed renewable energy sources’ (RES) capacity, attracted over half of the investments that poured into the sector between 2020-2024.
Among all the RES, cumulative investments in solar power stood at around Rs 2.64 lakh crore, which is about 66 per cent of the total investments in the RES sector.
CEEW emphasised that tenders with energy storage components accounted for 24 per cent of the total RE auctions completed in FY25, highlighting the continued innovation ki in RE auction formats.
These developments were further complemented by sovereign green bond auctions by the Reserve Bank of India, which totalled $3.8 billion across six issuances, it added.
Shalu Agrawal, Director of Programmes at CEEW, said that to power a growing economy through clean and affordable energy, India’s power sector is rapidly tapping India’s RE potential through diversified financing sources, innovation in tender design and embracing new technology options for energy storage.
“One of the most promising trends of FY25 has been the discovery of very attractive prices for energy storage, which will enable cost-effective grid integration of renewables. We look forward to an inflection point on storage soon, just like it happened for solar technology a decade ago,” she added.
In FY25, the handbook pointed out that India’s total installed power capacity reached 475 GW, of which 220.1 GW (46.3 per cent) came from RE. Coal capacity stood at 221.8 GW (46.7 per cent) at the end of FY25.
As of 31 December 2024, 142.67 GW of RE capacity is under construction, comprising 82.3 GW of solar, 24.5 GW of wind and 35.8 GW of hybrid capacity, among others.
Published on May 7, 2025
India’s strong commitment towards realising its energy transition goals, including installing 500 gigawatts (GW) of non-fossil fuel power capacity, is bearing fruits with annual foreign direct investment (FDI) in the sector rising by a whopping 700 per cent between FY21 and FY25.
The Council on Energy, Environment and Water’s Green Finance Centre’s (CEEW-GFC) latest annual edition of its market handbook, released on Tuesday, notes that share of renewable energy (RE) in India’s total FDI inflows rose from around 1 per cent in FY21 to about 8 per cent in FY25.
“The RE sector attracted $3.4 billion in FDI in first three quarters of FY25, nearly matching the total FDI inflows for the whole of FY24 ($3.7 billion). This growth in investment reflects the sector’s rising appeal to global investors,” it added.
“Post FY20, FDI in RE sector saw a steep increase, amounting to around $12 billion till FY25. RE share of total FDI is on a continuous upswing over the last 5 years, growing from a low of 1.3 per cent to 8.4 per cent in FY25,” CEEW said.
Compared to RE, FDI in the power sector saw a massive dip in Q3 FY25, amounting to around $125 million, it added.
Under the extant foreign direct investment (FDI) policy, FDI in the renewable or non-conventional energy (RE) and power sectors is permitted up to 100 per cent under the automatic route.
Gagan Sidhu, Director of CEEW-GFC pointed out that India’s energy transition is at a crossroads. RE has clearly emerged as the dominant source of capacity addition, along with around 42 GW of RE auctioned in FY25. Notably, 59 per cent of this capacity was auctioned under innovative formats like firm and dispatchable renewables (FDRE) and hybrids, helping address grid resilience concerns amid rising RE penetration.
“All of this has been supported by strong overseas interest in India’s RE sector. FDI inflows in the first three quarters of FY25 nearly matched the total for all of FY24,” he noted.
As per data from the Ministry of New & Renewable Energy (MNRE), total investments, including FDI, attracted by the sector—Solar, Wind, Small Hydro, Large Hydro, Nuclear and Bio—almost hit Rs 4 lakh crore in the last five years, ending 2024 calendar year.
Gujarat and Rajasthan, which cumulatively account for more than one-third of India’s installed renewable energy sources’ (RES) capacity, attracted over half of the investments that poured into the sector between 2020-2024.
Among all the RES, cumulative investments in solar power stood at around Rs 2.64 lakh crore, which is about 66 per cent of the total investments in the RES sector.
CEEW emphasised that tenders with energy storage components accounted for 24 per cent of the total RE auctions completed in FY25, highlighting the continued innovation ki in RE auction formats.
These developments were further complemented by sovereign green bond auctions by the Reserve Bank of India, which totalled $3.8 billion across six issuances, it added.
Shalu Agrawal, Director of Programmes at CEEW, said that to power a growing economy through clean and affordable energy, India’s power sector is rapidly tapping India’s RE potential through diversified financing sources, innovation in tender design and embracing new technology options for energy storage.
“One of the most promising trends of FY25 has been the discovery of very attractive prices for energy storage, which will enable cost-effective grid integration of renewables. We look forward to an inflection point on storage soon, just like it happened for solar technology a decade ago,” she added.
In FY25, the handbook pointed out that India’s total installed power capacity reached 475 GW, of which 220.1 GW (46.3 per cent) came from RE. Coal capacity stood at 221.8 GW (46.7 per cent) at the end of FY25.
As of 31 December 2024, 142.67 GW of RE capacity is under construction, comprising 82.3 GW of solar, 24.5 GW of wind and 35.8 GW of hybrid capacity, among others.
Published on May 7, 2025
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The point of using Lorem Ipsum is that it has a more-or-less normal distribution of letters, as opposed to using ‘Content here, content here’, making
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It is a long established fact that a reader will be distracted by the readable content of a page when looking at its layout. The point of using Lorem Ipsum is that it has a more-or-less normal distribution
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