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India to Top U.S. Lending With $575 Million in Solar Deals

The U.S. Export-Import Bank expects India to become its biggest recipient of funding next year, led by loans for clean-energy projects including $575 million of solar deals.

The Export-Import Bank’s lending plans won’t be affected by concern that the renewable energy industry may be vulnerable to a new global recession, said Craig S. O’Connor, director of the bank’s office of renewable energy.

“This sector isn’t risky,” O’Connor said in an interview at a conference in New Delhi. “It’ll continue to grow.”

The funding could ease a hurdle facing India as its aims to build 20,000 megawatts of solar capacity by 2022 and join Germany in trying to develop cleaner, safer sources of power after Japan’s nuclear disaster. About $3.2 billion of Indian projects have found it difficult to get loans from commercial banks, and more funding could help such U.S. panel producers as First Solar Inc. (FSLR) and SunPower Corp. (SPWRA) that face China competition.

“India could become Ex-Im Bank’s largest market next year,” with a bulk of the deals in the renewable-energy industry, O’Connor said.

The Export-Import Bank is authorized by Congress to lend as much as $100 billion to help finance projects that buy U.S. goods and services. It has approved $1.4 billion in new deals for India in this financial year, raising its overall lending to the country to $5.5 billion.

That includes $75 million in funding already approved for Indian solar projects, while another $500 million of deals are in the pipeline, O’Connor said.

Panchabuta believes that First Solar might not benefit as much, as in recent times, they have been offering panels manufactured in their Asia plants to developers that do not qualify for Ex-Im funding. However, we do think that Abound Solar could be one of the biggest beneficiary in the batch 2 phase 1 of the solar mission, if they have their strategy well planned.

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