The ministry of new & renewable energy has said half of the 37 firms awarded solar power projects are yet to achieve financial closure and their contracts will be terminated if they miss the July 9 deadline. “Any failure in meeting the deadline would result in forfeiture of bank guarantees,” a senior official in ministry of new & renewable energy said. He said, the ministry has received financial closure details of 17 photovoltaic (PV) and two concentrated solar power (CSP) projects. He declined to name individual developers.
The ministry had invited international competitive bidding in December last year to award seven CSP projects with 470 MW capacity and 30 PV projects with combined capacity of 150 MW under the national solar mission that provides subsidies to developers.
Developers said that they were facing problems in getting finance for their projects. “The sector is new and banks are apprehensive in funding solar projects. They demand huge collateral which every developer can’t afford,” one of them said requesting anonymity.
Banks and financial institutions say that they would finance projects only on the basis of their viability. “Only 2 CSP companies have approached us. We are funding on the soundness of balance sheet because we are concerned about the return,” said an official from Rural Electrification Corporation, a state owned lending agency.
“Developers are unwilling to provide collateral security on the main company’s balance sheet”, the official said requesting anonymity.
