India’s Minister of State for Power, Coal and New and Renewable Energy (Independent Charge), Piyush Goyal, has said that the renewable energy ministry has been impressing upon banks and financial institutions to provide low-cost and long-term finance for solar power projects to bring down the cost of solar power generation.

A refinance scheme was introduced under the National Clean Energy Fund in 2013-14 wherein NCEF funds are provided to IREDA at zero interest rate for lending to banks at an interest rate of 2 per cent, for refinancing up to 30 per cent of the loan given by them for renewable energy projects, at an interest rate of not more than 5 per cent. This scheme covers all renewable energy sectors, including solar. An amount of Rs.100 crore has been released to IREDA for this purpose till date.

The minister said that solar power generation projects for feeding power to the grid were set up mostly in private sector with largely private investment. The central government facilitates the same through fiscal and financial incentives such as accelerated depreciation, concessional/nil customs and excise duties, preferential tariffs and generation-based incentives.

No state-wise allocation of funds is made for such projects as the Ministry of New and Renewable Energy does not have a scheme to provide funds for large solar projects developed by state government and UT administrations. A new provision for ultra mega solar power projects has been included in this year’s budget. The scheme is, however, still under preparation.

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