NEW DELHI: Banks are looking to ease lending norms for small and medium scale solar panel manufacturers, who account for half of the domestic capacity and are facing headwinds from surging duty-free imports from southeast Asian countries under FTA (free trade agreement). At a recent meeting with the manufacturers in Mumbai, bankers led by SBI agreed to ease the conditions of seeking collateral and take personal guarantee only from the owner and not their immediate family.
The lenders discussed other funding hurdles the manufacturers pointed out at a July 18 meeting the financial services secretary had with renewable energy ministry officials and bankers. The ministry’s presentation listed high borrowing costs compared to China, limited capital pool due to the sectoral version of banks, a reduced debt ceiling and short tenor of loans among key issues.
North India Module Manufacturer Association president Manish Gupta sought priority sector/infrastructure lending status and interest subvention for small and medium solar enterprises. “They make up 50% of domestic capacity and generate more employment than mega factories. Surging FTA imports make government support necessary as panel manufacturing will need over Rs 1 lakh crore in investment over the next few years to meet solar targets,” he said.
“The PLI (performance linked incentive) scheme has largely benefited big players. Issues are dominated by big players, leaving out small and medium module makers, who account for half of the capacity in the country ,” he said to underline the importance of small and medium players.
