India weighs low-cost loans for RE projects hit by power curbs

India is considering offering low-cost loans to renewable energy producers to compensate them for losses they ​have incurred because inadequate transmission infrastructure limited how much they ​could supply, four industry sources said.

The South Asian nation's transmission network has ‌struggled to keep pace with the increase in green energy, particularly solar, which represents about 162 gigawatts, or nearly a third of its power generation capacity, according to government figures.

The sources said India's renewable energy developers have lost about 45 billion rupees ($470.21 million) since February 2025 as the limited infrastructure has restricted the flow of clean power from states such as Rajasthan and Gujarat to the national grid.

 

In some cases, nearly 70%-80% of power from renewable projects could not be added to the grid, one of the sources ‌said.

The sources spoke on condition of anonymity because they were not authorised to speak publicly on the issue.

The federal power and finance ministries did not immediately respond to a Reuters email seeking comment.

Government data shows India, which is the world's third-biggest solar power generator, curtailed 14%, or 8,133 gigawatt hours, of its solar power output between April and June.

The sources said the power ministry was considering ​low-interest loans with long tenures of seven to eight years to compensate producers.

They said the ‌government was discussing the plan with energy producers and seeking to verify which projects are eligible for compensation.

Sanjeev Aggarwal, founder and executive chairman of ​Hexa Climate, ‌which develops renewable projects, said his company had experienced curbs without giving details and ‌that it raises problems for financing.

"Lenders need confidence in future generation when they size debt," he said. "If curbs are frequent and uncompensated, it would lead to ‌higher ​cost of capital ​for the project."

Rating agency ICRA estimates that about a third of India's newly commissioned 54.8 GW of clean energy capacity was being evacuated ‌through temporary transmission ​as of May 2026.

($1 = 95.7025 Indian rupees)