**Executive Summary**
This document is the response to Lok Sabha Unstarred Question No. 2905, answered on December 17, 2025, regarding the investment gap in the renewable energy sector in India. It details the investments made in the sector over the past five financial years and outlines steps taken by the government to increase investment. No specific deadlines or action items for external entities are mentioned.
**Key Points / Main Content**
* **Investment Details:**
* Over the last five financial years, approximately Rs. 7.16 lakh crore has been deployed in the Renewable Energy (RE) sector.
* Key contributors include Public Sector Banks, IREDA, PFC, REC, SIDBI, IIFCL, and NaBFID.
* Investment in the RE sector increased from Rs.0.66 Lakh crores in 2020-21 to Rs.2.68 lakh crores in 2024-25.
* India requires an estimated Rs. 30.5 lakh crore from FY 24 till FY 30 to achieve 500 GW of non-fossil fuel-based power capacity.
* **Government Initiatives:**
* The government has allowed 100% Foreign Direct Investment (FDI) in the sector under the automatic route.
* The government is raising and allocating funds using Sovereign Green Bonds.
* RBI has enhanced the eligibility limit of priority sector classification for bank loans up to Rs. 35 crore for renewable energy-based power.
* **Renewable Finance Obligation (RFO):**
* No proposal on Renewable Energy Finance Obligation (RFO) has yet been finalized by the Government.
**Impact Analysis**
**Stakeholder: Public Sector Banks, IREDA, PFC, REC, SIDBI, IIFCL, and NaBFID**
* **Impact:** These institutions have collectively deployed significant capital in the RE sector, contributing to the growth of renewable energy capacity. Further mobilisation of RE finance is required to meet national targets.
* **Action Required:** Continue to provide financial support to the RE sector.
**Stakeholder: Investors (Domestic and Foreign)**
* **Impact:** The Government has taken steps to increase deployment of investment in Renewable Energy sector including allowing 100% Foreign Direct Investment (FDI) in the sector under the automatic route.
* **Action Required:** Investors may benefit from enhanced eligibility limits for bank loans.
**Stakeholder: Reserve Bank of India (RBI)**
* **Impact:** RBI has enhanced the eligibility limit of priority sector classification for bank loans up to Rs. 35 crore.
* **Action Required:** RBI needs to monitor and ensure the implementation of the enhanced eligibility limit for priority sector classification of loans to the renewable energy sector.
Key Entities Referenced
Renewable Energy (RE) sector: The primary subject of the question and answer, concerning investment and financing.
IREDA: Indian Renewable Energy Development Agency, plays a key role in financing renewable energy projects.
Reserve Bank of India (RBI): Financial institution that has enhanced the eligibility limit of priority sector classification for bank loans to renewable energy.
Lok Sabha: Parliament where the unstarred question was raised.
Ministry of New and Renewable Energy: The ministry responsible for renewable energy policy and answering the question.
GOVERNMENT OF INDIA
MINISTRY OF NEW AND RENEWABLE ENERGY
LOK SABHA
UNSTARRED QUESTION NO. 2905
ANSWERED ON 17.12.2025
GAP IN INVESTMENT IN RENEWABLE ENERGY
2905. SHRI P V MIDHUN REDDY
Will the minister of new and renewable energy be pleased to state:
(a) Whether it is a fact that there is a huge gap between the required and actual
investment for Renewable Energy capacity addition in the country and if so, the
details thereof;
(b) The details of the required annual investment and the actual annual investment in the
sector during the last five years;
(c) The steps taken by the Government to find alternative financing mechanisms;
(d) Whether the Government has considered the possibility of prescribing banks and
financial institutions to invest a certain percentage of their investments in renewable
energy through a Renewable Finance Obligation (RFO); and
(e) If so, the details thereof and if not, the reasons therefor?
ANSWER
THE MINISTER OF STATE FOR NEW & RENEWABLE ENERGY AND POWER
(SHRI SHRIPAD YESSO NAIK)
(a) & (b) Over the last five financial years, a cumulative amount of about Rs. 7.16 lakh crore
has been deployed in the Renewable Energy (RE) sector by Public Sector Banks, IREDA, PFC,
REC, SIDBI, IIFCL and NaBFID. Break-up of year-on-year capital deployed by these
institutions is placed at Annexure-1.
The investment in the RE sector has increased considerably from Rs.0.66 Lakh crores in 2020-
21 to Rs.2.68 lakh crores in 2024-25 although higher mobilisation of RE finance to meet
national targets, particularly in emerging segments such as energy storage, green hydrogen,
offshore wind, and transmission infrastructure is required.
As per IREDA’s report titled “Investment and Financing in RE and Associated Infrastructure,”
India requires an estimated Rs. 30.5 lakh crore from FY 24 till FY 30 to achieve 500 GW of
non-fossil fuel-based power capacity.
(c) to (e) Government has taken various steps to increase deployment of investment in
Renewable Energy sector including allowing 100% Foreign Direct Investment (FDI) in the
sector under automatic route and raising, and allocating funds using Sovereign Green Bonds.
Further, Reserve Bank of India (RBI) has recently enhanced the eligibility limit of priority
sector classification for bank loans up to Rs. 35 crore to borrowers for renewable energy-based
power.
No proposal on Renewable Energy Finance Obligation (RFO) has yet been finalized by the
Government.
*****Annexure referred to in part (a) & (b) of Lok Sabha Unstarred Parliament
Question No. 2905 for 17.12.2025
ANNEXURE - 1
A m t . in R s . C r
In s t it u t io n / s
P F C
R E C
IR E D A
P u b lic S e c t o r
B a n k s + IIF C L + S ID
B I+ N a B F ID
F D I
T o t a l
.
2 0 2 0 - 2
5 4 8 9
3 2 6 3
8 8 1 4
4 2 5 8 3
5 9 1 6
6 6 0 6 5
1 2 0 2 1 - 2
7 0 2 2
3 4 0 4
1 5 9 5 7
3 8 1 1 3
1 1 9 2 7
7 6 4 2 3
2 2 0 2 2 - 2 3
1 5 1 1 2
1 1 2 0 9
2 1 3 0 1
5 4 7 5 0
2 0 0 8 9
1 2 2 4 6 1
2 0 2 3 - 2 4
1 8 9 4 1
1 5 8 2 2
2 4 4 9 6
9 2 5 5 9
3 1 1 6 2
1 8 2 9 8 0
2 0 2 4 - 2 5
3 1 6 9 5
2 5 6 0 8
2 9 8 8 2
1 4 7 4 1 7
3 3 5 6 7
2 6 8 1 6 9
T o t a l
7 8 2 5 9
5 9 3 0 6
1 0 0 4 5 0
3 7 5 4 2 2
1 0 2 6 6 1
7 1 6 0 9 8