Debt structure as a determining factor for deployment pace
IEEFA states that the scale of investment required directly ties India’s energy transition to the structure and depth of the country’s debt markets. Long-lived renewable assets depend on long-tenor amortising debt, placing debt availability, tenor, and cost at the centre of capacity expansion. The organisation notes that the structure of credit markets directly shapes the pace of new installations.
Credit markets are now distinguishing between renewable and thermal assets, according to the report. Renewable assets show stronger margins, lower operating costs, and wider access to capital, whilst thermal assets face tighter access to international capital markets. IEEFA notes that all outstanding USD-denominated bonds from Indian power utilities relate to renewable or hydro assets.
A shallow domestic bond market
India’s corporate bond market remains shallow and dominated by loans, according to IEEFA. Among the eight utilities analysed, nearly 80% of debt comes from loans. This persists despite annual issuances exceeding $500 billion in 2025 on the broader bond market, illustrating the limited participation of Indian issuers in capital markets.
The report cites the 2021 offshore bond repayment by Tata Power as a withdrawal point for thermal-linked offshore issuance. The eight companies studied — Adani Green Energy, Adani Power, JSW Energy, ReNew Power, NLC India, NTPC, SJVN, and Tata Power — represent approximately one-third of India’s installed power capacity.
A call for greater domestic institutional investor participation
IEEFA warns against excessive reliance on foreign capital flows, noting that mobile foreign capital creates exposure to reallocation during geopolitical stress. The report calls for greater participation from domestic institutional investors — including pension funds, insurers, and provident funds — as a stabilising source of long-term finance. These actors are positioned as a counterweight to the volatility of international capital markets.
