Energetica India Magazine: september 2020

SOLAR POWER Financing Trends in Rooftop Commercial & Industrial (C&I) Segment The market growth seen in the C&I segment so far is largely driven by a few entities such as large creditworthy or- ganisations. Because financial institutions prefer borrowers with a strong financial track-record and credit ratings of BBB+, loans and other financial services are largely provided to a few elite consumers. But this growth also suggests there are myriad market expansion opportunities among micro, small- and medium-sized enterprises if they can get appropriate financing. 44 energetica INDIA- September_2020 To make rooftop solar more affordable, the Government of India negotiated con- cessional lines of credit from the World Bank and the Asian Development Bank among others. The Indian Renewable Energy Development Agency (IREDA) formulated a scheme for system aggre- gators and developers in commercial, industrial and institutional segments, under which low cost loans would be provided for projects with minimum ca- pacity of 1,000 kWp and with minimum capacity of sub-projects not less than 20 kWp. The State Bank of India (SBI), PNB (Pun- jab National Bank), ICICI Bank and Axis bank, along with key financing compa - nies such as Power Finance Corporation (PFC), Rural Electrification Corporation (REC), Tata Cleantech, Piramal Finance and L&T Financial Services provide non-concessional credit schemes. Various concessional credit lines for rooftop solar developers are available from multilateral agencies. Investments Raised by Key Rooftop Project Developers Many established rooftop solar project developers were also able to success- fully raise substantial equity as well as debt capital in the last three years. The PETRONAS Group acquired Amplus for $391m. Other significant player is Cleantech Solar which raised $240m as both equity and debt. A joint report of JMK Research & Analytics and IEEFA Table 1: Details of Concessional Credit Lines Available in India Figure1:Key Investment Deals in Rooftop Solar Sector in India (2017-2020) From 2017 onwards, rooftop solar sec- tor companies raised about more than US$1,249 m in funding. Of this about 31% (US$383m) is equity funding while 38% (US$475m) is debt. The remaining 31% (US$391m) is PETRONAS Group of Malaysia’s acquisition of Amplus in April 2019. New Innovative Financing Models to Boost Adoption in MSME Segment The market growth seen in the C&I seg- ment so far is largely driven by a few en- tities such as large creditworthy organ- isations. Because financial institutions prefer borrowers with a strong financial track-record and credit ratings of BBB+, loans and other financial services are largely provided to a few elite consum- ers. But this growth also suggests there are myriad market expansion opportu-