The industry had recently recommended to the government to remove the cap of Rs 15 crore per year under priority sector lending for rooftop projects, ease the credit limits significantly and remove them in a phased manner
New Delhi: The renewable energy industry has given a thumbs-up to the government’s latest move to unlock financing for smooth credit flow for development of green energy projects.
Power and renewable energy minister R K Singh held a review meeting earlier this week with industry players where it was decided that the Ministry of New and Renewable Energy (MNRE) will request the Reserve Bank of India (RBI) to categorize renewable energy as a separate segment from power and remove the priority sector lending limit for the green energy sector.
“The proposed ease of financing will boost solar adoption for the commercial and industrial segment. We are glad to see the introspective move made by Power Minister R K Singh at the review meeting and, if implemented, the move will prove to be a respite for the Indian solar sector,” said Sunil Rathi, Director, Waaree Energies, an Engineering, Procurement and Construction (EPC) player and the country’s largest solar photovoltaic module manufacturer.
Another key industry player, rooftop solar developer CleanMax Solar, said both the steps will ensure higher availability of credit finance and give a much-needed boost to the sector. “We welcome the strong impetus by MNRE to ensure that the country meets its renewable target. Availability of credit has been a brewing issue and has impacted the growth momentum of renewable energy in the last six months,” CleanMax Chief Financial Officer (CFO) Nikunj Ghodawat said.
The industry had recently recommended to the government to remove the cap of Rs 15 crore per year under priority sector lending for rooftop projects, ease the credit limits significantly and remove them in a phased manner.
“We are glad the government is helping in easy availability of credit and reducing the cost of capital. This will result in speedy implementation of projects and also reduce cost of construction which can help us pass this benefit to our corporate power consumers,” Ghodawat said.
Post the review meeting, the ministry had also decided to launch a scheme to encourage electronics manufacturing for renewable energy which will have a provision of direct subsidy for domestic manufacturers. Another key decision was to take a flexible approach to renewable energy capacity addition targets.
“The introduction of subsidy in the manufacturing sector will finally help domestic manufacturers amplify their capacities, thus reducing the market’s dependence on international players. Moreover, while the flexibility of renewable segmentation may slow down solar project execution, it will provide developers with the impetus to opt for Indian manufacturers,” Rathi said. “Such reduced dependence on imports will strengthen the Rupee denomination, thus contributing to India’s GDP and employment generation scenario,” he added.
MNRE had convened a brain-storming session with the industry players last month where several large companies had raised multiple concerns over development and operation of projects. These included delays and defaults in payments by discoms; the financial impact of change in law and regulations not getting covered properly in PPAs; the variations in regulations between different states; and the force majeure clause of the PPA failing to cover all the events outside the control of the developers.
Singh had said during the meeting with the industry players the government is building a payment security mechanism under SECI to tackle the issues of delayed payments for developers. A recent report had highlighted discoms in Andhra Pradesh, Telangana, and Karnataka owe NTPC Rs 18.84 billion ($262.6 million) in dues for solar power supplied by projects under the National Solar Mission.
Source: energy.economictimes.indiatimes
