1. India’s weak risk profile affects investor reward: Fitch unit

India’s weak risk profile affects investor reward: Fitch unit

India is ranked 16th on the global power risk and reward index, but the overall score is dampened by the country's weak risk profile, Fitch Group's BMI Research said today.

By: | New Delhi | Published: May 25, 2017 10:06 PM
India, weak risk, profile affects, investor reward, Fitch unit, global power risk, weak risk profile, Fitch Group The rewards on offer to investors, it said, are significant, given the strong macroeconomic and demographic fundamentals driving power demand and capacity growth. (Reuters)

India is ranked 16th on the global power risk and reward index, but the overall score is dampened by the country’s weak risk profile, Fitch Group’s BMI Research said today. “India is ranked 16th on our Global Power Risk and Reward Index and 8th in the Asia regional rankings,” BMI Research said in a statement. The rewards on offer to investors, it said, are significant, given the strong macroeconomic and demographic fundamentals driving power demand and capacity growth.

“However, the overall score is dampened by India’s weak risk profile, which includes high levels of bureaucratic and legal risk, particularly land acquisition bottlenecks and corruption,” the research unit added. Risks remain high and serve to dampen investor interest in the market, potentially weighing on power project commissioning across the country, it said.

“In terms of the breakdown of indicators that make up the industry risk matrix, India scores moderately for energy policy and financial barriers in light of the country’s supportive renewable policy and improving access to finance,” it added.

However, it sees India’s underdeveloped and inefficient grid infrastructure as a bottleneck for deployment of power and renewables projects. As per the report, legal risks remain high while taking into consideration the overall strength of the rule of law, the extent of corruption and investor protection.

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