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Moody’s forecasts $360 billion of investment in India’s power sector.

India will need to invest as much as $385 billion to meet its target of 500 gigawatts (GW) of renewable energy by 2030, but coal will remain a key source of power generation over the next decade, Moody’s Ratings

India, a major greenhouse gas emitter, has said it aims to add 50 GW of non-fossil fuel capacity each year to meet its 500 GW target. It has missed its target of 175 GW by 2022.

However, Moody’s estimates that an annual capacity addition of about 44 GW will help meet that target.

To do that, India will need to spend $190 billion to $215 billion on capacity and another $150 billion to $170 billion on transmission and distribution over the next six to seven years, the rating agency said.

“The sizable pipelines of announced projects are likely to keep the financial leverage of rated renewable energy companies high, a credit negative, over the next two to three years, but the leverage of government-related issuers is likely to remain moderate over the same period,” Moody’s said.

India’s strong policy support has boosted the share of renewables in the country’s power capacity mix to around 43% by fiscal 2023-24, attracting private sector investment.

The Adani Group, through Adani Green Energy, is targeting 45 GW of renewable power generation by 2030 to become the country’s first integrated renewable energy player.

Continued policy support will facilitate significant progress toward India’s 2030 transition and 2070 net-zero targets, Moody’s said.

However, despite the steady growth in renewable energy, most of which will likely be solar, Moody’s expects coal to play a significant role in power generation over the next eight to 10 years.

“We expect India to add 40GW-50GW of coal-based capacity over the next five to six years to meet electricity demand, which is expected to grow by 5%-6% annually over this period.”

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