According to report, the US Ex-Im Bank and the Overseas Private Investment Corporation (OPIC) have refuted allegations that they are distorting India’s solar manufacturing sector.
The Centre for Science and Environment (CSE), an Indian research and advocacy organisation, last week said that Ex-Im Bank and OPIC have fuelled crisis in India’s domestic solar manufacturing by offering low-interest loans to Indian solar project developers on the condition that they buy their equipment from US companies.
This is an “unethical practice” that “will do more harm than good to domestic industry”, CSE said.
However, Judith Pryor, vice-president of external affairs at OPIC, told Environmental Finance that the development finance institution does not require its clients to buy US goods and services, although some do so of their own accord. Of OPIC’s six current solar projects in India, four do not involve US-made solar panels, she said.
“OPIC provides financing that is unavailable from local or foreign private-sector financial institutions. In other words, we don’t compete with the local markets. And before OPIC supports a project, we determine whether that project will be subject to any trade-related performance requirements,” she added.
The Indian government has set a target to install 22,000MW of solar power capacity by 2022, against around 1,000MW at present, up from almost none in 2009. Its National Solar Mission mandates a domestic content requirement, but only for crystalline photovoltaic (PV) technology and not for thin-film PV technology.
CSE claims that Ex-Im and OPIC have taken advantage of this by offering “very low rates of interest”, of about 3%, and long repayment schedules of up to 18 years, on the condition that developers buy thin-film panels manufactured by US companies.
“Any OECD member country can offer financing for up to 18 years – this is not special to the US,” said a spokesman for Ex-Im, which is the primary US export credit agency. “We don’t set the interest rates, [those are] negotiated between the borrower and the lender.”