“The first rate hike in over three years was expected. The more important signal is the shift to calibrated tightening, which tells developers to plan for a cycle of increases and not a single move. Power and infrastructure projects are financed largely through long-tenor debt, so the cost of capital flows directly into the cost of electricity.
A 25 basis point increase is absorbable and does not change project economics on its own. What the sector must now do is price upcoming bids and financing plans for a higher-rate environment. Electricity demand continues to grow strongly, and that will keep capital flowing into new capacity.”