According to reports, Jain Irrigation plans to invest Rs 200 crore next financial year to enhance its capacity in solar energy, food processing and micro irrigation at Jalgaon in Maharashtra. The company recently acquired 500 acres of wasteland near its existing location in Jalgaon and intends to double its solar power production to 17 MW.
Anil Jain, Managing Director, said the cost of setting up solar project has come down significantly with technological advancement and better efficiency.
For instance, he said the capital cost to set up solar project has come down from Rs 14 crore per one MW to Rs 8 crore in the last three years.
The demand for solar-based equipments is increasing in the farm sector with erratic power supply in rural areas. The increase in the cost of diesel is also driving farmers to rely on solar equipments.
“Instead of providing free power and subsidising diesel, the government can provide one-time assistance to farmers for buying solar-based equipments. This will result in significant saving to the exchequer and farmers will also be protected from diesel price hike,” said Jain.
The company expects its non-banking finance company, Sustainable Agro-commercial Finance, to have disbursed Rs 25-50 crore in the first quarter of its operation ended December.
Though the lending by NBFC will initially be to part-finance Jain Irrigation projects, it will also cater to the farmers need at a later stage.
The NBFC was promoted to improve the cash flow as subsidy received from the Government for irrigation projects are generally delayed.
Now, the NBFC will lend farmers the subsidy portion of the project and recover the same as and when the government reimburses it to the farmers.
In the last nine months, the company’s receivables reduced to Rs 2,750 crore from Rs 4,750 crore, said Jain.