Financial health of discoms hurdle for renewable energy sector: Moody's

The payment delays to the state-owned distribution companies are common, leading to a build-up of receivables from off-takers and an increase in working capital debt for renewable energy companies

The weak financial health of state-owned distribution companies (discoms) will remain a challenge for India's renewable energy sector, where investments worth $225-250 billion are estimated to reach a generation capacity of 500 GW by 2030, according to Moody's.

The payment delays to these companies are common, leading to a build-up of receivables from off-takers and an increase in working capital debt for renewable energy companies.

The rating agency in a statement said that the weak financials of state-owned distribution companies have led to delays in the signing of Power Purchase Agreements (PPAs). This in turn occasionally results in project delays