The Indian Railway Finance Corporation (IRFC), the dedicated funding arm of the Indian Railways, has disbursed a ₹10 billion (~$108.05 million) term loan to Maharashtra State Power Generation Company (MAHAGENCO).

MAHAGENCO will use the funding to enhance its operational capabilities. The company has an installed power generation capacity of 13,880.55 MW. This capacity includes 10,200 MW from thermal power plants, 672 MW from wind projects, 2,580.2 MW from hydroelectric projects, and 428.35 MW from solar projects.

MAHAGENCO has formed a joint venture with SJVN for developing 5 GW of renewable energy projects in Maharashtra, with a target of 735 MW in the first phase. During this phase, the joint venture will develop the 125 MW Ghatghar Phase-2 pumped storage project, the 105 MW Irai floating solar project, and 505 MW of floating solar projects on reservoirs.

Last March, IRFC won a bid to extend a rupee term loan of ₹75 billion (~$861 million) to NTPC Green Energy. The finance corporation is actively exploring opportunities to fund the renewable energy needs of the Indian Railways and metro rail projects. It also lent ₹31 billion (~$35.58 million) to a thermal power generation subsidiary of NTPC.

IRFC also partnered with Railway Energy Management Company to finance renewable energy projects awarded by the latter to supply power to the railways.

Besides Indian and foreign commercial banks, government-owned agencies, Power Finance Corporation, REC, and Indian Renewable Energy Development Agency, actively lend to the renewable energy sector.

If India must install 500 GW of non-fossil fuel-based energy capacity by 2030, the states would require a cumulative grant of ₹140.64 billion (~$1.6 billion) every year over the next five years, according to the National Council of Applied Economic Research.

These funds must be devolved to the states by the Finance Commission in the form of green energy grants, considering the potential, installed capacity, and current trend in spending on renewables, it said in a report, ‘Public Financing for Renewable Energy Sector Development: Recommendations for the 16th Finance Commission.’