Govt earmarks Rs 1.5k cr for solar projects over next 2 yrs

NEW DELHI: The government would dole out Rs 1,500 crore over the next two years to banks and finance companies to lend money to solar energy projects at a generous 5% interest rate, a top government official said.

The money would be lent to small solar projects adding up to 200 mw by companies like Sidbi, Nabard and National Housing Bank. These lenders would be provided interest-free loans by the Indian Renewable Energy Development Agency (IREDA), an arm of the renewable energy ministry.

The agency would also provide funds to state-run banks in urban areas at 2% interest rate.
This would allow conservative bankers to lend more to renewable sectors, said Debashish Majumdar, chairman and managing director of IREDA, a non-banking financial institution that provides term loans for renewable energy and energy-efficiency projects.

The projects are coming up under Phase 1 of the national solar mission. The mission aims to add 20,000 mw of solar power by 2022.

IREDA is likely to achieve a net profit of Rs 100 crore in the current financial year against Rs 73 crore in the last fiscal.

The loans sanctioned by the agency have increased from Rs 1,823 crore in 2009-10 to about Rs 2,300 crore this year. With disbursements growing at a robust 30%, the agency is likely to achieve Rs 1,150 crore in the current fiscal as against Rs 889 crore in the last fiscal.

Recently, it signed a Rs 1,200-crore agreement with Germany’s Kfw Bank and it would sign a deal with Japan International Co-operation Agency by the end of March for Rs 1,650 crore.