MUMBAI -- Indian companies from startups to the sprawling Tata group are investing more in wind and solar power, emboldened by government efforts to improve urban air-quality levels that are among the world's worst.

Goldman Sachs-backed unicorn ReNew Power pans to expand its renewable energy capacity by about 60% by 2021. Local rival Greenko Energy Holdings, which counts a Singapore wealth fund among its investors, is also growing its base.

These moves come as India's government seeks to double nationwide capacity to 175 gigawatts by 2022, up from the current level of about 86 GW, to reduce reliance on particulate-spewing coal power plants.

The market is poised for expansion, and "the ability to grow really is only determined by our own ability to execute the projects," Sumant Sinha, chairman and managing director of ReNew Power, told Nikkei in a recent interview.

The company plans to add 3 GW of wind and solar capacity through June 2021, bringing the total to 8 GW. After that, Sinha expects to increase capacity at a pace of 1.5 GW to 2 GW per year, with the expansion financed by income from electricity sales.

About $1 million of investment is required to create 1 megawatt of renewable energy capacity, according to Sinha. ReNew Power raised $375 million last March through a green bond issue, and another $300 million through a share sale to investors including HSBC.

A solar power plant in Gujarat, the state where Indian Prime Minister Narendra Modi was born. © Reuters

Sinha originally oversaw energy investment and financing for Citigroup. He later worked for Suzlon, India's largest wind turbine maker, accumulating expertise in the renewables business. In 2011, Sinha founded the startup ReNew Power in Gurugram, near New Delhi.

The company has grown into a unicorn -- an unlisted startup worth more than $1 billion. It received funding from the likes of Goldman Sachs, the Asian Development Bank, and JERA -- a Japanese electricity joint venture between Tokyo Electric Power Co. Holdings and Chubu Electric Power.

ReNew Power's earnings have been robust. In the fiscal year ended March 2019, the company's sales rose around 70% to about 48 billion rupees ($672 million). Net profit more than doubled to 800 million rupees.

Rival startup Greenko Energy, founded in 2004, is also widening its reach in renewables. The company signed agreements last summer to raise over $800 million from the Singaporean sovereign wealth fund GIC and the Abu Dhabi Investment Authority.

Greenko plans to allocate funds in solar, wind and power storage projects spanning 4 GW of output capacity. Sales jumped by half in the fiscal year ended March 2019, while net profit climbed 18%.

To reduce air pollution, India's government has begun inviting private-sector companies to bid on renewable energy projects. Successful proposals generally gain the right to sell power for 25 years.

New Delhi has a long-term goal of reaching 450 GW in renewable energy capacity. Renewables will constitute nearly 20% of India's energy mix in 2040, according to estimates by BP, up from 7% in 2017.

With the government stetting a direction, even typically slow-moving conglomerates are pivoting toward renewables.

Tata Power, part of India's largest conglomerate Tata Group, has stepped up its business of installing rooftop solar panels on power plants, factories and public facilities. The utility also won bids for renewable energy projects in multiple states.

Adani Group, a conglomerate whose portfolio includes energy and resources, recently submitted a bid to develop a 6 GW power project estimated to cost tens of billions of rupees. Last year, the group spent 13 billion rupees on acquiring solar assets.

India's expansion of green energy is not without hazards that are unique to the country. Not only does the government tend to rewrite regulations frequently, acquiring land also takes an inordinate amount of time, said ReNew Power's Sinha.

Solar panels and wind turbines are prone to damage from severe weather. Because of those concerns, ReNew Power is increasing recruitment of engineers with experience in the renewable energy sector, said Sinha.