Challenges and Opportunities for IPPs in Emerging Markets

Emerging markets present a unique paradox for Independent Power Producers in India and across the developing world. On one hand, these regions offer explosive growth potential, driven by rising energy demand, supportive government policies, and ambitious clean energy targets. On the other, they pose formidable obstacles: regulatory uncertainties, grid infrastructure limitations, and financing complexities that can test even the most experienced developers. 

India exemplifies this duality perfectly. With ambitious targets of 500 GW of renewable energy capacity by 2030, the country has become a beacon for IPP Power Solutions. Yet the path forward demands more than capital and technology, it requires strategic vision, operational excellence, and unwavering commitment to sustainability. 

The Big Picture: Why IPPs Matter More Than Ever 


India’s energy demand is projected to double over the next two decades, driven by urbanisation, industrial growth, and digital infrastructure. At the same time, the country has committed to ambitious renewable energy and decarbonisation targets. This is where IPPs step in as strategic players, delivering IPP Power Solutions that are scalable, bankable, and future-ready. 

As one of the foremost Independent Power Producers in India, Mahindra Susten develops, owns, and operates large-scale renewable energy projects that contribute meaningfully to India’s pursuit of a cleaner, more sustainable energy ecosystem. This dual role, commercially viable and climate-aligned, is becoming the new baseline for success in emerging markets. 

Key Challenges Facing IPPs in Emerging Markets 

Let’s not sugarcoat it. The terrain is complex. 

1. Policy Volatility and Regulatory Complexity 

While emerging markets offer strong intent, policy frameworks can be inconsistent across states and regions. Changes in tariffs, delays in approvals, and evolving grid regulations can impact project timelines and returns. For IPPs, this means building agility into planning and execution because predictability isn’t always guaranteed. 

2. Financing and Cost of Capital 

Renewable energy projects are capital intensive. In emerging markets, access to low-cost, long-tenure financing remains a challenge. Currency risks, evolving credit markets, and investor risk perception often push up the cost of capital, directly affecting project viability. 

3. Land Acquisition and Infrastructure Gaps 

Land availability, grid connectivity, and transmission readiness continue to be real-world bottlenecks. Delays in evacuation infrastructure or right-of-way approvals can slow down even the most well-planned projects. 

The Opportunity Stack: Where IPPs Can Win 

Now for the upside, because it’s significant. 

1. Massive Renewable Energy Demand 

India’s renewable energy targets are not just ambitious; they’re actionable. With strong government backing, long-term power purchase agreements (PPAs), and growing corporate demand for clean energy, IPP power solutions are operating in a demand-rich environment. 

2. Portfolio Scale and Platform Thinking 

Scale is no longer optional but strategic. A diversified, multi-gigawatt portfolio helps IPPs manage risk, attract institutional capital, and optimise operations. Mahindra Susten’s comprehensive portfolio spans over 5 GWp of capacity, with ~1.54 GWp of IPP projects developed and divested to the SEIT InvIT, alongside 3.6 GWp in the development pipeline. This platform-led approach allows capital recycling while maintaining long-term growth momentum. 

3. ESG Alignment as a Competitive Advantage 

Here’s the plot twist: sustainability isn’t just good ethics, it’s good business. Global investors, lenders, and partners are increasingly ESG-first. IPPs that can demonstrate credible climate action, governance discipline, and transparent reporting are winning faster access to capital and partnerships. 

A strong signal of this commitment is science-based target alignment. Mahindra Susten is the fourth Independent Power Producers in India to have its targets approved by the Science Based Targets initiative (SBTi), a milestone that reinforces credibility in global climate conversations. 

Technology and Innovation: The Silent Multiplier 

At Mahindra Susten, we've approached these opportunities with a comprehensive strategy that goes beyond project development. As an IPP power solutions, we develop, own, and operate large-scale renewable energy projects that contribute meaningfully to India's pursuit of a cleaner, more sustainable energy ecosystem. Our approach integrates technical expertise with financial innovation, asset management and stakeholder engagement to deliver solutions that work in the real world, not just on paper, improving efficiency, reducing downtime, and enhancing predictability across the asset lifecycle. 

The Road Ahead 

The future of IPP Power Solutions in emerging markets will be defined by those who can execute at the intersection of commercial discipline and developmental impact. For Independent Power Producers in India and other emerging markets, the future is not about choosing between growth and responsibility. It’s about designing IPP Power Solutions that do both, at scale. 

The challenges are real, but so is the opportunity to redefine how energy is produced, financed, and consumed. IPPs that combine operational excellence, financial innovation, and climate accountability won’t just participate in the energy transition, they’ll lead it. 

Location: India

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