Financing solar projects rapidly getting easier

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Although financing of PV solar projects in India continues to pose challenges, industry experts say it will soon become much easier to obtain investment

“Solar is a logical market to invest in, but in India it is still complex because there is less experience,” says Edwin Koot, CEO of Solarplaza. Finance solutions will therefore be a crucial theme at the conference The Solar Future: India II, which is organised by Solarplaza and will be held in Jaipur on 29 February, according to a PRNewswire report.

“Banks here are cautious to invest in solar projects, as they are only starting to get an idea of how reliable the technology is, that it assures a good output and hence cash-flow,” Koot says.

Ravindra Raina, President of India operations for Astonfield, says that the government could do more to address the issue of bankability. “The interest rates for finance are as high as 12 per cent. Even if you borrow abroad against 3 to 4 per cent, the hedging costs will be high. The government would be able to take this hedging risk.”

Using his significant experience in investment management, Raina will discuss financing solutions for the solar industry at The Solar Future: India II. “Indian banks, for example, could be directed to invest a certain percentage in renewable energy—similar to the Renewable Purchasing Obligation imposed on the utilities”, he says, adding: “This kind of support is necessary, at least until the first 10GW solar capacity is built in India. After that, market forces will take over.”

Edwin Koot agrees: “We are now in the stage of smelling, tasting and learning. This takes time, but once investors are used to it, developments can take off rapidly and I expect that by 2014, the Indian solar market is unstoppable.”

Besides financing solutions, themes such as the market potential of solar energy in India and government policies will feature at The Solar Future: India II. Attention to global trends and future visions, internationally renowned experts and an informal networking atmosphere give the event a unique character.

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