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India has set an ambitious renewable energy target of 450 GW by 2030. Meeting the target will require $600 billion in financing for new generation and grid infrastructure, including $200 billion for PV and wind capacity. Sector financing must scale rapidly to meet this target. Mobilizing needed capital will be difficult given the complex renewable energy (RE) sector investment risks. The goals of this paper are to: 1) guide stakeholders in systematically understanding these risks and 2) empower them with risk mitigation strategies. We complement this body of work by presenting Indian RE sector insights that have been distilled from 18 months of 40 primary research interviews with leading sector investors, independent power producers, consultants and policymakers. The work begins by overviewing India's RE progress to date and motivating a systematic understanding of sector investment risks. The power sector's political-economic structure is then explained. The financial distress of India's DisComs is emphasized along with its troubling impact on RE investments. Subsequently, nine strategic sector investment risks and corresponding mitigation strategies are discussed: project development risk, offtaker risk, stranded asset risk, volume risk, curtailment, regulatory risk, inflation, exchange rate risk, and tail risk. Offtaker risk—the most significant risk—is comprehensively discussed. Finally, we raise critical questions on evolving variables that will determine the future sector risk profile. The ideas and frameworks presented herein are also relevant to emerging markets with a similar power sector structure.
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