Fearing NPAs, Banks Shun Renewable Energy Companies; Here Are Reasons Why That Is

Fearing NPAs, Banks Shun Renewable Energy Companies; Here Are Reasons Why That Is

Lenders are worried about the drop in tariff in the renewable power sector and are increasingly becoming more cautious in lending to the sector on fears their loans could turn into non-performing assets (NPAs), bankers said. The tariff for renewable energy like solar power and wind power has fallen drastically in the recent years, hurting the finances of renewable energy companies. Bankers are worried that these companies might not be able to service their loans, given that their earnings have been squeezed.

Weak financial health of state-owned power distribution companies, the key customers of most of the renewable projects, is another key concern since it often leads to delays in payments. Read More…

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