India's power capacity projected to hit 900 GW by 2032

The NEP estimates a total capital expenditure of approximately US$361b.

India’s National Electricity Plan (NEP) projects that capacity will reach 609 gigawatt (GW) by 2027, and 900 GW by 2032, according to a CareEdge report.

In line with this, the NEP estimates a total capital expenditure of approximately $361b for capacity addition and transmission infrastructure.

“Since projects are typically funded in a 75:25 debt-equity ratio, this investment scale creates a significant debt funding opportunity for lending institutions,” the report said.

Power-focused Infrastructure Finance with adequate capitalisation and healthy accruals has the opportunity to leverage its balance sheets and capitalise on the sector's growth.

The potential debt scale also allows other Infrastructure Finance Companies and Infrastructure Debt Funds to significantly increase their power sector exposure.

Despite rising competition, CareEdge Ratings expects P-IFCs' contribution to incremental funding for the power sector will be over 50%.