FINANCING PV PROJECTS IN INDIA, AND THE CHALLENGES THAT DEVELOPERS FACE?

FINANCING PV PROJECTS IN INDIA, AND THE CHALLENGES THAT DEVELOPERS FACE?

Indian renewable energy sector has been attracting equity capital successfully. The challenge is in debt financing. While there is a strong payment security cushion from Central Govt agencies, lenders have shown concerns on the financial health of distribution utilities and the ability of Central Govt agencies to maintain good payment track record in absence of timely payment from the ultimate buyers. Having said that, several measures have been taken over the past few months to improve the payment security in the recent past. A noteworthy measure being the advance LC mechanism that is slowly but surely taking root in the system. Also, the sooner regulatory and policy clarity can be provided on factors such as GIB conservation measures, duty imposition on solar modules etc, the better it would be for the industry. Such measures should go a long way in assuaging lender concerns.

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