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Solar Energy Corporation of India to be setup with an initial capital of Rs. 20 billion

According to reports, India is setting up a company with initial capital of 20 billion rupees ($405.6 million) to build federal solar projects and help the country reach a target of 20 gigawatts of solar energy capacity by 2022, a top government official said.

The decision to create the company comes at a time when some solar and renewables experts are worrying that due to a shortage of funds and a relative lack of interest by commercial companies, India might miss solar energy targets set under a federal program.

“A dedicated company will ensure that we meet our targets effectively,” Renewable Secretary Gireesh B. Pradhan said in a recent interview.

He said the company–Solar Energy Corp. of India–will gradually take over responsibility for federal solar projects from NTPC Vidyut Vyapar Nigam Ltd., an arm of India’s largest power producer NTPC Ltd.

A first round of bidding, for about 1 GW projects, under what is known as the national solar mission drew little interest from domestic and foreign companies, with critics citing low tariffs, narrow margins and financial difficulties as deterrents.

The second round of bidding, following a tweaking of bidding rules seems to have generated more interest, though. Results are due to be announced within a week, and winners in the two rounds have to start production by March 2013.

“Also, simultaneously, we are working to infuse more capital in our renewable financing company [the Indian Renewable Energy Development Agency],” Mr. Pradhan said. He said the new solar company will also help finalize funding of solar projects.

The financing company now has total reserves of about 13 billion rupees, with about half of this provided by the government.

Mr. Pradhan said India is planning to launch road shows in the U.S. and Europe in May to attract investment in renewables, especially the solar energy sector, for the next phase of the solar program, which is scheduled to be launched in the financial year that begins April 1, 2013.

The country aims to add 4-7 GW of solar capacity in the that phase, which ends in 2017.

Mr. Pradhan said that India isn’t planning antidumping duties on Chinese solar equipment, but there could be import duty increases on certain products, mainly coming from China, in the next financial year’s budget, which is due to be announced in March. He didn’t elaborate.

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