United States’ Development Bank to Support 450 MW of Solar Projects in India

The projects belong to ReNew Power, Sitara Solar, and Paryapt Solar


The U.S. International Development Finance Corporation (DFC) has approved $1 billion (₹75 billion) to help enhance sustainable development processes in Africa, Latin America, the Indo-Pacific, and other emerging markets, including India.

DFC was established in 2019 through the BUILD (Better Utilization of Investments Leading to Development) Act. The BUILD Act combined the capabilities of the Overseas Private Investment Corporation (OPIC) and the Development Credit Authority (DCA), which had previously been housed in the U.S. Agency for International Development (USAID).

The board also approved a project that would address resource scarcity in India. To address the issue, DFC announced that up to $30 million (₹2.3 billion) investment in the South Asia Growth Fund II would support businesses in the energy, water, and food sectors across India.

The additional projects which have been already approved by DFC include strengthening energy security in India, enhancing the power supply, and generating solar power.

“These projects will uplift some of the most underserved communities around the world,” said Adam Boehler, the DFC’s chief executive officer.

He said that the impact of these projects would be particularly meaningful as the world continues to fight the health and economic fallout of the coronavirus pandemic.

According to DFC, a $142 million (₹10.7 billion) loan has also been approved, which will help ReNew Power develop a 300 MW solar power project in Rajasthan. In December 2019, Mercom had reported that ReNew Power announced a joint venture partnership with South Korea’s GS E&C for the construction of a 300 MW solar power project in Rajasthan. The project was a part of the Solar Energy Corporation of India’s (SECI) tranche-IV auctions, which concluded earlier in 2019.

Similarly, to enhance the power supply in the country, DFC approved a $50 million (~₹3.8 billion) loan to Sitara Solar Energy Private Ltd., to build and operate a 100 MW solar power project in the state of Rajasthan. Last year in March, four solar projects developers, Fortum Solar (250 MW), ACME Solar (250 MW), Sitara Solar (100 MW), and Palimarwar Solar (40 MW), had quoted the lowest tariff of ₹2.48 (~$0.0349)/kWh in the auction held by SECI for 750 MW of solar power projects.

Under the additional projects, a $27.3 million (₹2.1 billion) loan has also been approved to enable Paryapt Solar Energy Private Ltd, to build and operate a 50 MW solar power project in Gujarat.  In February 2019, Paryapt Solar emerged as the lowest bidder to develop a 50 MW solar project. It had quoted a tariff of  ₹2.55 (~$0.035)/kWh. The auction was conducted by the Gujarat Urja Vikas Nigam Limited.

Meanwhile, according to Mercom Capital Group’s Q1 2020 Solar Funding and M&A Report, the total corporate funding in the solar sector, which included venture capital funding, public market, and debt financing   by 31% at $1.9 billion (~₹143.4 billion) in Q1 2020 as compared $2.8 billion (~₹211.35 billion) raised in Q1 of 2019. The report attributed the downturn in funding activity to lower venture capital and public market financing as the COVID-19 pandemic has affected people and industries across the globe.