Covid 19 and its Financial impact on Renewable sector

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The full financial impact of the coronavirus (Covid-19) impact on the India Renewable sector is still not clear. The coronavirus (Covid-19) pandemic will inevitably create short-term uncertainty and prompt lenders to divert their attention to managing liquidity rather than lending capital to renewable sector. The depth of the economic fall-out from the Covid-19 pandemic will determine how quickly markets return to normality. Supply and labour disruptions caused by India’s nationwide lockdown could mean 400MW of wind projects due for completion this year are delayed into 2021, according to Wood Mackenzie. Before the outbreak of the virus, the analysts had predicted 3.5GW of projects being commissioned this year, but they have now revised their forecast down 11.4% to 3.1GW. The analysts warned that there was a high correlation of Indian states with the highest coronavirus infection rates and are as favorable to wind and solar development. For example, Gujarat’s 1.4GW of new wind farms installed last year accounted for 58% of India’s new additions in 2019. It is also in one of the top ten worst hit states for Covid-19 cases. Wood Mackenzie also lowered its forecast for solar PV additions by 2.9GW (down 24.8%), again citing supply and labour disruptions. It warned that if the pandemic continues to escalate and the lockdown is extended, utilities and renewables developers could struggle financially.

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