FINANCING GRID INTERACTIVE SOLAR POWER PROJECTS: ROADMAP
Upcoming target of the Government is 1,00,000 MWp solar power of which 40,000 MWp is to come from rooftop GISPS Projects. Considering the crucial role of banking sector to achieve this massive target, the discussions were held on the various aspects of providing loans, challenges before the banks and the requirements of individuals/organizations for financing the projects. The following Roadmap emerged out in the discussion:
1. Ministry of New And Renewable Energy (“MNRE”) will prepare a reference manual for banks (“Reference Manual”).
2. Reference Manual will cover different aspects of Grid Interactive Solar Power Systems (“GISPS”) including technical details, standards, accredited channel partners, cost, States policies, list of service providers, State Nodal Agencies, State Nodal Departments etc.
3. A working group of about 5 (five) banks (with representations from Solar Energy Corporation of India, Indian Renewable Energy Development Agency, Rural Electrification Corporation etc.) (“WG”) will be formed for financing of GISPS projects.
4. WG will take up regulatory issues/roadblocks with Reserve Bank of India (“RBI”), Department of Financial Services or any other government agencies.
5. The respective banks will formulate their schemes for providing loans for GISPS projects and popularize though print and electronic media.
6. MNRE is also in the process of arranging international low cost funding through international financial organizations like World Bank, ADB etc. which will be implemented through Public Sector and Private Banks. Their modality will be finalized in consultation with these banks.
7. Banks expressed their willingness to participate in the GISPS projects with 70% of the project cost to new entrepreneurs. The rest 30% equity will be arranged by the different sources by new entrepreneur.
8. Power Purchase Agreement, Land Ownership and assets of the GISPS projects may be taken as a collateral, security from the entrepreneur for financing of the project.
9. Banks opined that the loans rate of interest cannot be below their base rate. The permission from RBI would be required if the loans are to be given at the interest rate below the base rate. MNRE will send a proposal to RBI accordingly.
10. MNRE will organize exposure visit of bank officials in various project sites in the adjoining areas.
11. All banks representatives agreed to follow the advisory issued by Department of Financial Services for providing loans for installation of rooftop GISPS to the loan seekers as a part of home loan/ home improvement loan.