India Rating, the domestic rating agency, has maintained a stable and positive outlook on the solar power sector, while it is quite bullish, from negative to upward, on the wind power sector, but having a negative outlook for the thermal power segment.
The reason of this negative outlook for the thermal power sector, as cited by the rating agency, is the lack of the absence of long-term power purchase agreement (PPA) and there is no sign of change in the policy so far.
In a report, the rating agency said, “Development of guarantee funds by states/bidders, incentives to local solar panel manufacturers and exploring of wind-solar hybrid projects and offshore wind projects indicate a sustainable growth momentum in renewable power.”
As per the agency, counterparty risks and sufficient liquidity back-ups are the most critical factors for the renewable project. However, the agency maintained a pessimistic outlook on the thermal power sector for the Financial Year 2019, due to non-visibility of tying up of projects with long-term PPAs.