The Export-Import Bank of the United States (Ex-Im Bank) announced today that it is providing a $16 million long-term loan to support the exports of First Solar Inc. in Tempe, Ariz., to Azure Power Rajasthan Pvt. Ltd. in New Delhi.
During the first nine months of fiscal year 2011 through June 30, Ex-Im Bank approved 173 transactions (including this loan) totaling $1.4 billion in financing to support U.S. exports to India, which will support over 10,000 U.S. jobs. The Bank’s India-related authorizations in FY 2011 through June are up from a total of $53 million in FY 2010.
India currently ranks first among Asian nations in Ex-Im Bank authorizations and exposure. The Bank anticipates that India will be its largest single-country market in the world in FY 2012.
In the Azure Power transaction, First Solar will export thin-film photovoltaic modules to Azure Power for the construction of a five-megawatt (MW) solar project in the state of Rajasthan. Additional U.S. suppliers of related equipment include SMA Solar Technology in Rocklin, Calif., and General Cable Corp. in Highland Heights, Ky.
The Azure solar-power plant in Jayal, Rajasthan is one of the first utility-scale solar-power plants in India under the Jawaharlal Nehru National Solar Mission, which aims to develop over 20,000 MW of installed solar power by 2022. When the Azure solar-power plant is connected to the grid, it will benefit more than 50,000 people and is estimated to reduce carbon emissions of up to 5,500 metric tons per year.
Ex-Im Bank is the first international financing institution to approve solar-power projects under India’s National Solar Mission and one of the first to approve financings under the solar-power policy of the state of Gujarat. In fiscal year 2011 to date, the Bank has approved financing totaling approximately $75 million for four solar projects in India. The Bank also has about $500 million of India solar projects in the pipeline that will generate an estimated 315 MW of solar power.
“India has set ambitious goals to increase solar-energy production and is creating incentives to encourage solar companies to develop this market. Ex-Im Bank is pleased to partner with Azure Power to enable a robust solar-power sector in India. We are working with U.S. exporters to make sure that they have the competitive financing they need to participate in these important initiatives,” said Ex-Im Bank Chairman and President Fred P. Hochberg, who announced the transaction today in New Delhi.
“This is a great example of U.S.-India cooperation in the renewable-energy sector. The long-tenure $16 million investment from Ex-Im Bank enables us to deploy the best-in-class U.S. technology to meet India’s clean-energy objectives under the National Solar Mission, specifically the goal of reaching grid parity,” said Azure Power CEO Inderpreet Wadhwa.
“Financing is a critical part of any solar project, and the support from Ex-Im Bank has helped to provide Azure Power with First Solar’s advanced, thin-film modules,” said James Brown, First Solar senior vice president. “Collaborating with Ex-Im Bank accelerates renewable-energy deployment, allowing our customers to meet the growing demand for clean, renewable solar energy in India.”
The repayment of Ex-Im’s 16.5-year loan is based on the cash flows generated by the sale of electricity to NTPC Vidyut Vyapar Nigam Ltd. (NVVN), a wholly owned power trading subsidiary of India’s National Thermal Power Corp and the agency responsible for the purchase and sale of solar power under the first phase of the National Solar Mission. The Indian government has provided special power-price incentives through NVVN.
Ex-Im Bank has also provided or assisted in financing U.S. solar-energy exports to three other projects in India in FY 2011 to date: the Dalmia Solar Project in Rajasthan, the Punj Lloyd Solar Project in Rajasthan and the ACME Solar Technology Project in the state of Gujarat.