India Ratings and Research Pvt Ltd downgraded its ratings outlook for the solar sector to stable from positive, citing continued delay in payments from power distribution companies (discoms) and fears of tariff renegotiations.
Discoms are large buyers of electricity in India and their revenue shortfalls have hit payments to power producers. This, in turn, has worsened the financial metrics of renewable energy projects.
During 1 January-15 August, renewable energy projects in India Rating’s portfolio saw 25% more downgrades than upgrades. This is in variation to the previous calendar year when projects in India Ratings portfolio saw more upgrades than downgrades.
The ratings downgrades are largely attributable to delays in payments from the offtakers, which are mostly the state government owned discoms. Read More
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