International Finance Corporation (IFC), the private sector investment arm of the World Bank, is ramping up its exposure to renewable energy projects in India with two fresh debt finance deals related to solar and wind power space.

It may lend $34.3 million to Chennai-based SEI Solar Power Pvt. Ltd to part finance its greenfield solar PV power plant project in Jodhpur (Rajasthan), while lending $40 million to PTC India Financial Services, which will be used exclusively for on-lending to wind based power projects in Maharashtra and Tamil Nadu.

SEI Solar investment

The total investment to be absorbed in the 24MW project is pegged at around $49 million (Rs 270.5 crore) out of which IFC will contribute $34.3 million.

The power generated will be sold to the state owned power trading company, NTPC Vidyut Vyapar Nigam Ltd (NVVN), under a year 25 power purchase agreement (PPA)signed on January 2012. The deadline for commissioning the new project is February 2013.

SEI Solar Power is a 51:49 joint venture between South Korean arm of China’s CHINT Solar (Zhejiang) Co Ltd and SunEdison Energy Holding (Singapore) Pte Ltd, which is majority owned by NYSE-listed MEMC Electronic Materials Inc. IFC owns 15 per cent stake in SunEdison Energy Holding.

SunEdison is a wholly-owned subsidiary of MEMC Electronic Materials, a leading manufacturer of silicon wafers for semiconductor devices and solar manufacturers. The firm is a solar power system integrator/installer.

CHINT Solar (Zhejiang) Co., Ltd, a China-based private company, is the solar panel manufacturing arm of CHINT Group Corporation, China’s leading player in the electrical industry. CHINT Solar’s total revenue amounted to $762 million in 2011 compared with $298 million in 2010.

The new project will provide an opportunity to the Chinese private company to expand its business in India. The project was awarded under the second batch of the first phase of Jawaharlal Nehru National Solar Mission.

PTC India Financial Services:

IFC plans to provide a long term debt to PFS of up to $40 million in the form of a senior loan, which will be used exclusively for on-lending to wind-based power projects in Maharashtra and Tamil Nadu with capacity ranging between 75-125 MW.

This is in addition to the existing $50 million senior loan facility that has been provided by IFC to the company last year.

PFS is promoted by PTC India Ltd (formerly Power Trading Corporation), the largest power trading company in India. As on September 30, 2012, PTC holds 60 per cent equity stake in PFS with the other key shareholders being GS Strategic Investments Limited (8.7 per cent), GMFA Asia Venture (3.7 per cent), Macquarie India Holdings Limited (3.5 per cent), Emerging Markets Growth Fund (2.8 per cent) and Capital International Emerging Markets Fund (1.8 per cent).

It is a public listed non-deposit taking, non-banking finance company categorised as an Infrastructure Finance Company by the Reserve Bank of India. PFS is focused on funding projects across the energy value chain in India.

(Edited by Prem Udayabhanu)

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