The ‘500-plus MW’ includes all the seven solar thermal projects, whose total capacity is 470 MW.

Most of the companies that have won bids to put up solar power projects under the Jawaharlal Nehru National Solar Mission have achieved financial closure.

The total capacity of all the projects that have confirmed financial closure exceeds 500 MW, Mr Anil Agarwal, Chief Executive Officer, NTPC Vidyut Vyapar Nigam (NVVN) – the nodal agency for conducting the selection process for the first stage of JNNSM – told.

The ‘500-plus MW’ includes all the seven solar thermal projects, whose total capacity is 470 MW. At an approximate cost of Rs 12 crore a megawatt of capacity and working at a debt-equity mix of 70:30, the implication of the financial closures is that banks in India have come forward to lend around Rs 4,500 crore to the solar sector.

The project awardees have informed NVVN of their financial closure, but they have time till July 24 to submit the papers. The achievement of financial closure by the due date of July 9 is an encouraging sign, because earlier there was talk of projects struggling to convince banks to lend.

Among the banks that have agreed to lend are Bank of Baroda, Axis Bank, ICICI Bank, SBI and IDBI. In addition, L&T Finance and Exim banks of some countries have been involved, sources say.

A large part of the lending has been “with limited recourse” to the parent company of the solar project developer, says Mr Santosh Kamath, Executive Director, Management Consulting, KPMG Advisory Services Pvt Ltd.

The banks have asked for the “limited recourse” for a period up to one or two years after the project goes on stream, he said. The fact that most projects have achieved financial closure is a credit to the Ministry of New and Renewable Energy and industry organisations, notably the Federation of Indian Chambers of Commerce and Industry (FICCI) whose groundwork made it possible, notes Mr V. Saibaba, CEO, Lanco Solar, which is putting up a 100-MW solar thermal project in Rajasthan.

The groundwork operation — educating bankers on this new business — took place over the last six months, during which period many bankers were taken to Spain and shown operating thermal and PV plants, Mr Saibaba said.

Meanwhile, NVVN is preparing itself to launch the Batch II of the first phase of the JNNSM, under which 196 MW of solar PV projects would be put up for bidding. The ‘Request for Selection’ would come in mid-August, Mr Agarwal, CEO, NVVN, said.