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Budget 2013: Make financing attractive for solar projects in India, says FICCI

According to reports, in order to improve execution of solar energy projects in the country, FICCI solar power task force has demanded that the government take steps in budget 2013 to make financing more attractive for its developers.

FICCI has stressed that the solar energy sector should be supported through interest subsidy on the loans which could be availed through the National Clean Energy Fund. In addition to that the solar energy sector needs to have access to long term External Commercial Borrowings (ECBs) at reduced rates.

  At present, the industry is paying around 5% to hedge foreign exchange risk resulting in additional burden on the cost of the project. Government and banking sector should work towards developing solutions for hedging, FICCI said.

Besides, renewable energy sector should also be given priority sector lending status to promote both grid-connected as well as off-grid projects, it noted. FICCI also said that the government must provide payment security to solar energy sector.

Government offers a support of Rs 486 crore towards payment security mechanism. Despite that lenders are still wary about off-taker risk in the event of default including the payment capability of state electricity boards (SEBs) or discoms due to their weak financial health.

One comment

  1. Dear FICCI: Please quote this precedence of low cost interest (0.1 % per annum for 20 years for the complete project investment!!) and ask Government of India to make a policy with financial numbers to attract new and small entrepreneurs (engineers with PV back ground) and provide them the loan, keep a government nominee on the board of this small entrepreneurs’s company (who does not own a business till now) till the loan repayment with assured energy bill payment too. India can easily produce 50,000 MW in 5 to 8 years with a 25 MW to 50 MW of solar PV project in every taluka where 1.5 MU/MW can be produced. Hence, we do not need to spend huge costs on Nuclear Deal or such projects apart from Next Generation Killer radiation Hazardous raw material….. Please make government to create jobs through millions of small entrepreneurs through Entrepreneurship Funding, instead of Promoting few brother of Tata, Ambani, Goels, Ruias as India has many common men as Brothers and we need to distribute the Natural resources to many INDIANs and not few….

    Tata Nano Gujarat loan amount row?
    Tags: Gujarat Nano Plant | Tata Motors Nano | Gujarat Government | Auto News
    Four years after Tata Motors relocated its Nano plant from Singur to Sanand, the “sweet deal” it was reportedly offered by the Gujarat government is turning out to be sour, with the first instalment of the promised soft loan of over Rs 2,000 crore yet to be disbursed to the company.
    The two sides have not even been able to agree on the loan amount and annual disbursement, despite a series of meetings between officials and Tata executives. According to a top official, a Gujarat government committee has approved a provisional loan of Rs 2,138.85 crore at 0.10 per cent annual interest, but the company’s demand is much higher.
    As per Tata’s claim and a government resolution issued on January 1, 2009, the projected investment in the Nano plant, including the cost of shifting from Singur, is Rs 3,466 crore. State Industries Commissioner Kamal Kumar Dayani said the issue was yet to be resolved though the government had agreed to release Rs 120 crore in the first instalment. “We haven’t received a formal claim from the company,” Dayani said, adding that the amount could not be released until the company formally sought it.
    As part of the State Support Agreement signed between the two sides in 2008, the government had agreed to offer a loan at 0.10 per cent annual interest based on the total value of investment and the loan was to be repaid in 20 years after the commencement of the project. Sources said the government and the company differed on the land cost and payment terms. The company was supposed to pay Rs 400 crore to the government for 1,100 acres it was allotted near Sanand.
    A Tata Motors spokesperson responded to an email, saying, “The agreement between the company and the Government of Gujarat is internal to the two parties, and therefore we cannot engage on this topic.”
    Among the auto majors that have set up operations in Gujarat, Tata Motors is the only one being extended a soft loan.

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