Varied Funding Sources Essential to Close Energy Infrastructure Financing Gap: Moody’s
Moody’s Highlights Need for Diverse Capital to Close India’s Energy Funding Gap
According to Moody’s Ratings, securing a variety of capital sources, particularly foreign investment in both debt and equity forms, is essential for addressing the funding shortfall in India’s energy transition infrastructure. Abhishek Tyagi, Vice President and Senior Credit Officer at Moody’s, stated, “We anticipate continued active engagement from the private sector in India’s renewable energy landscape, with increased participation from government-owned entities as well.”
Future of Energy Generation: Solar and Wind to Lead
Tyagi further indicated that over the next 20-25 years, solar and wind power are set to be the primary contributors to new generation capacity, alongside minor contributions from nuclear and hydropower sources. The rating agency forecasts that investments in the power sector will represent about 2% of real GDP over the next decade.
Coal Power Generation Set for Significant Growth
Additionally, strong economic growth in India is expected to drive an increase in coal-based power generation capacity by approximately 32%-35%, translating to about 70GW-75GW in expansion over the next ten years.
Road Development Projects: A Cautious Outlook
In the realm of road construction, Moody’s affiliate ICRA has reported that project awards, which have seen a slowdown over the past 6-8 quarters, are anticipated to pick up in the latter half of FY2026. Ashish Modani, Senior Vice President and Group Head of Corporate Ratings at ICRA, noted, “Revenue growth for road developers is likely to remain stagnant over the next 12-15 months, given that it typically takes 6-9 months from project award to the actual commencement of work (the first billing milestone).”
Competitive Bidding Amidst Profit Pressure
Furthermore, Modani added that road developers are expected to aggressively pursue bids for central government road projects in an effort to replenish their dwindling order books, which will, in turn, place continued pressure on their operating profitability.
