This should come as good news to companies in the UK, China, Germany, US and India. Seventeen public sector, private sector and foreign banks have given the government a commitment to fund 72,000 MW of solar power project worth Rs 500,000 crore (over $80 billion at current exchange rates).
At a recent meeting with Indian power minister Piyush Goyal, the chairperson of State Bank of India, the country’s largest lender, made a commitment to fund 15,000 MW of solar power projects. At $1 million per megawatt, this would translate into projects valued at $15 billion.
Other banks also made smaller commitments. “Individual banks will finance projects depending on their financial viability and the credentials of the companies concerned,” a senior official of the Indian Banks Association, the apex body of Indian banks said.
Companies from China, the UK, US and Germany have expressed interest in setting up manufacturing facilities for solar power equipment as well as solar power plants in India. Britain, in fact, has asked for a dedicated sub-quota within the government’s target of 100,000 MW to be reserved for British companies.
Since coming to power in May last year, the Narendra Modi government has focused on increasing the share of renewable energy in India’s energy basket from less than 10 per cent to 40 per cent.
At the recently concluded Renewable Energy Conference, the government received commitments for setting up 266,000 MW of solar, wind and bio-mass-based power projects.
To ensure that these commitments translated into actual projects on the ground, Goyal held a closed door meeting with the CEOs of the companies and told them to revert with firm plans — and revised their targets if they had over-committed beyond their capacity – within a week after which he would hold them to their word.
In a related development, Cabinet Secretary Ajit Seth held a meeting with 13 departmental secretaries to ensure that there were no regulatory or other delays in implementing the projects once the firm commitments were received.