Punjab National Bank to Provide $500 Million to Finance Rooftop Solar Projects in India
The Punjab National Bank (PNB) will finance rooftop solar projects in India through a customized program and will provide up to $500 million (~₹32 billion) in term loans to developers from the Asian Development Bank (ADB), stated on the SPIN website.
Under the program, PNB is targeting sole proprietorship firms, partnership firms including, limited liability partnership (LLP), limited companies, private limited companies, trusts, associations, special purpose vehicle (SPV), non-banking finance companies (NBFCs) and registered societies.
The financing will be provided in the form of need based term loans of a maximum of up to 15 years. The first-year interest will be 8.35 percent, which will go up by 30 to 50 base points (bps).
To secure a loan of up to ₹1 million (~$15,592) no collateral security will be required. The PNB has said that the required project agreements, including PPAs, clearances, and approvals, should be in place, before disbursement of the first tranche for each individual loan under the overall sanctioned credit facility.
This is the second development in 2017 in which ADB is providing a loan to PNB to finance solar growth. In May, the ADB approved a first tranche of a $100 million (~₹6.46 billion) loan to PNB for financing large solar rooftop systems on industrial and commercial buildings in several states.
Funding from development banks and institutions. Recently, the State Bank of India (SBI) announced it will provide ₹4 billion (~$62.2 million) to private developers to finance 100 MW of grid-connected rooftop solar projects in India. The financing is being provided by the SBI under a World Bank program. In May 2016, the World Bank and SBI signed agreements for a $625 million (~₹40.2 billion) facility to support India’s grid-connected rooftop solar program.
According to Mercom’s India Solar Project Tracker, rooftop installations have crossed 1.2 GW in India as of August 2017.
Image credit: SPIN, MNRE
Priya Sanjay
More articles from Priya Sanjay.
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