SBI Successfully Raises $1 Billion for ESG Financing as Bank Loans to Renewable Energy Sector in India Soar

Amid the State Bank of India’s (SBI) recent announcement of successfully securing $1 billion through a Syndicated Social Loan to bolster the domestic Environmental, Social, and Governance (ESG) financing market, Reserve Bank of India (RBI) data brings to light a substantial rise in overall bank lending.

Renewable energy, in particular, has witnessed an impressive surge, exceeding a remarkable 100% year-on-year increase in outstanding bank loans. RBI data reveals that loans to the renewable energy sector more than doubled, reaching ₹4,191 crore by the end of October 2022, compared to ₹2,073 crore a year earlier.

This surge is indicative of a robust trend in underwriting loans for renewable energy projects. The data underscores the nation’s growing climate sensitivity, with a discernible shift towards renewable energy in light of surplus capacity in the conventional power sector and challenges faced by state distribution companies.

Madan Sabnavis, Chief Economist at Bank of Baroda, points out that power generators are increasingly embracing renewables, aligning their strategies with the sector’s future aspirations. The substantial increase in bank loans to the renewable energy sector reflects the industry’s vitality and its pivotal role in shaping India’s sustainable and eco-friendly future.