State Bank of India (SBI), the country’s largest lender, announced the sanction of loans worth Rs 2,317 crore (USD 625 million) in collaboration with World Bank to seven large corporates towards financing Grid Connected Rooftop Solar projects.
The companies include JSW Energy, Hinduja Renewables, Tata Renewable Energy, Adani Group, Azure Power, Cleantech Solar and Hero Solar Energy, with an aggregate capacity of 575 MW.
The banks will give loans at 15 basis points (bps) over marginal cost of lending rates — the benchmark rate of the bank. The bank can draw the loan within five months and is expected to draw the line of credit within 18 months.
Rajnish Kumar, Chairman of SBI said, “The advantage of giving loan to solar power projects is there is no fuel supply risk unlike other power projects. Secondly, it helps in protecting mother Earth.”
He said that the bank would lend to those companies that are commercially viable and have the credentials for solar.
SBI has so far sanctioned 43 projects with aggregate credit facilities of Rs 2,766 crore under the programme. This would add 695 MW of solar rooftop capacity to the grid.
The bank has outstanding loans of Rs 12,000 crore to solar energy projects and bad loans are negligible in this sector, Kumar added.