Financial ratings agency ICRA downgraded 1.9GW of wind and solar projects, and cited “significant headwinds” impacting investor sentiment, in another sign of the challenge India faces to hit its 2022 renewable energy goals.

ICRA’s downgrade covers about a fifth of its rated portfolio, with another 10% placed on a revised outlook – another ominous signal over confidence – as the agency noted “the headwinds faced by the wind and solar energy power segments coupled with a gradual deterioration in the liquidity profile of the IPPs [independent power producers]”.

ICRA – a unit of global ratings giant Moody’s – claimed the wind and solar segment “is facing significant other headwinds in the near-term which has impacted investor sentiments”, citing a slowing down of PV tendering and “subdued” solar additions of 2.9GW in the first six months of the current fiscal year.

The fragile financial state of India’s state-controlled power distribution utilities has become a major headache for renewable project developers and their investors, which are owed a collective 97bn rupees ($1.4bn) by ‘discoms’, a situation aggravated by disputes with the government in the key renewable state of Andhra Pradesh.

ICRA said such issues “have adversely affected the credit profile of the wind and solar power projects having PPAs with these state discoms”.

The ICRA downgrade comes soon after a note from India’s other big ratings agency, CRISIL, warning that wind and solar developers are losing patience with the country’s policy “incoherence”, and claiming the nation will fall well short of its ambition to hit 175GW of installed renewables by 2022.

The CRISIL claims drew a stinging response from India’s Ministry of New and Renewable Energy, which insisted it is on course to not just meet, but exceed the goal, which is a flagship policy of the government of Prime Minister Narendra Modi.