The remaining $390 million went to Renew Power, one of the largest renewable energy generators, as debt funding to finance nearly 700MW of new wind and solar capacity.
There have been many other big-ticket foreign investments in the past, including direct investments from pension funds and large private-equity firms.
But the increased funding from multilateral development banks (MDBs) and development finance institutions (DFIs) in recent years is a big shot in the arm for the India, which is targeting a gargantuan 175GW of renewable energy by 2022.
The government is expecting the MDBs and DFIs to play a large role in providing the nearly $150 billion of funding required over the next few years. However, for the wind industry sector, the funding from MDBs and DFIs goes beyond mere financing.
Renewable-energy financing in India faces multiple challenges, including high interest rates, lack of long-term debt instruments and conservative risk-assessment norms. The country's commercial banks have been very slow in warming up to the sector.
The intervention of MDBs and DFIs through co-financing with local banks is helping to standardise risk-assessment strategies, allowing commercial banks to increase lending through concessional finance structure, credit-risk sharing and due diligence.
In addition, direct financing of select projects by these MDBs and DFIs is going a long way in proving the viability of high-risk or expansion projects that may not get funding through traditional instruments.
The strategic commitments made by MDBs and DFIs to support climate-change mitigation over the next few years form the bulk of their future investments, and a large part of this funding is expected to flow into the renewable-energy sector in India, Latin America and China.
Committed
The IFC, for example, has maximum exposure in India. It has already invested $5 billion in a 3GW renewables portfolio, as of June 2016. IFC is also helping the Indian state of Madhya Pradesh build a 750MW solar project, one of the world's largest.
The World Bank and ADB each committed $1 billion. Germany's KfW Bankengruppe also pledged EUR1 billion for India's green projects.
The availability of funding from the New Development Bank (formerly BRICS Development Bank), with $100 billion of authorised capital, and the Asian Infrastructure Investment Bank (AIIB) is expected to further boost the financing for renewables in India.
Thanks to India's huge size - and with its potential impact on greenhouse gases — combined with a successful track record of renewable-energy deployment and its very ambitious 175GW target as part of its climate action plan, MDBs and DFIs are increasingly seeing the country as a natural choice for renewables investments.
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