We believe the following measures can meaningfully unlock the next wave of renewable investment and execution.
Bilateral Renewable PPP Framework (PSU–Private Partnerships)
India’s energy transition will increasingly require strategic partnerships between public sector enterprises and private renewable developers, especially for storage, hybrid and green-fuel projects.
The Budget should announce a clear policy framework enabling bilateral partnerships between PSUs and private developers for renewable energy projects, supported by a dedicated budgetary allocation to incentivise such collaborations. Providing budgetary approval for non-tendered strategic projects in identified priority segments, supported by viability gap funding for such bilateral partnerships, fast-tracking of approvals, and single-window clearances, can unlock large-scale capacity rapidly. Extending this model to international bilateral partnerships, especially in green hydrogen and e-fuels would also help India attract long-term global capital aligned with its energy transition goals.
This will accelerate execution of complex, capital-intensive projects and leverage PSU balance sheets alongside private innovation.
Scaling Green Hydrogen Adoption
Green hydrogen represents a transformational opportunity for India’s energy transition.
The Budget should prioritise the scale-up of green hydrogen through clear industry mandates, targeted funding support, and cost-compensation mechanisms, alongside incentives for end-use adoption to stimulate demand and strengthen the green fuels ecosystem. Such measures will help bridge the initial viability gap for consumers and accelerate adoption across hard-to-abate sectors.
Driving Innovation Through R&D Support
Sustained growth in renewable energy will require focused investment in innovation, backed by strong policy and financial support. Dedicated programmes to promote research and development across renewable technologies, grid integration, storage, and efficiency solutions will be critical to improving competitiveness and reducing long-term costs. The Budget should support pilot projects for green fuels and emerging technologies in energy storage, enabling the sector to explore financially viable and scalable solutions.
Further, targeted funding support for private players to explore new avenues and develop next-generation solutions in the renewable energy space—through a dedicated R&D fund—will help accelerate innovation and strengthen India’s clean energy ecosystem.
Growth Micro-Credit Window for High-Growth, Non-Rated Enterprises
India has a growing pool of renewable and energy-transition companies that are operationally strong but remain unrated due to scale, age or evolving business models. Access to expansion capital for such companies remains constrained.
The Union Budget should consider the creation of a dedicated, growth-oriented micro-credit facility under MSME or Startup India to support non-rated yet growth-oriented companies. This should be complemented by an alternative credit assessment framework that places greater emphasis on cash flows, project execution capability, and the strength of underlying contracts, rather than relying solely on formal credit ratings. In addition, the Partial Credit Guarantee Scheme could be extended to cover non-rated borrowers undertaking capacity expansion, while an interest subvention of 2–4 percent would encourage lenders to extend growth capital to such entities and help lower their cost of financing.
These measures would enhance the inflow of private capital, reduce cost of funds, and enable faster scaling of renewable, storage and green-fuel platforms.
Centralised Renewable Payment Security Mechanism
While tendering processes and capacity additions have seen encouraging progress, timely payments from DISCOMs will further strengthen investor confidence in the renewable sector.
A government-supported emergency repayment fund would strengthen lender confidence by ensuring timely debt servicing for RE developers. Mandatory 2–3 months of payment cover by DISCOMs, through LCs, escrow accounts or fund contributions, stronger enforcement of Letters of Credit (LC) mechanisms, with automatic drawdown on delay, and priority payment status for renewable generators, over other DISCOM Liabilities, would bring long-awaited discipline to the ecosystem. A government-backed partial payment guarantee for renewable PPAs, direct payments routed through a central pool, reducing counterparty risk, and a real-time national payment settlement dashboard that tracks payment settlements and delays, would enhance transparency and materially reduce counterparty risk.
Predictable cash flows will lower risk premiums, reduce tariffs over time, and attract long-term capital into the sector.
Conclusion
India’s renewable journey has moved from ambition to execution. The next phase requires financial innovation, institutional confidence and systemic risk protection. A Budget that addresses these areas will not only accelerate renewable deployment but also strengthen India’s position as a global energy-transition leader.
