Listed player Tata Power’s step-down renewable energy subsidiary is set to raise $425 million in debt funding from the US International Development Finance Corp (DFC).
The money from the American development finance institution would be used to fund an upcoming greenfield 4.3 GW solar cell and module manufacturing plant being built by TP Solar Ltd, a subsidiary of Tata Power Renewable Energy Ltd, at the Tirunelveli district in Tamil Nadu.
Tata Power said in an exchange filing that the plant’s first module production is expected by the year end and the first cell production is likely to commence in the first quarter of FY24. The proposed funding is awaiting a US Congressional notification, Tata Power said.
The debt financing by the DFC comes just a day after the two-day G20 Summit in India, which was attended, among other global leaders, by US President Joe Biden.
This is, however, not the first time DFC is loaning money towards the Indian renewable energy sector.
In October last year, DFC had said that it is looking to focus on investments in the clean energy sector in India.
Back then, it had also announced a $10-million loan guarantee for Punjab Renewable Energy Systems, to fund the construction of seven biomass plants in the northern Indian state.
Apart from this, DFC had also committed to provide a loan of up to $500 million to US solar panel manufacturer First Solar, to be used for the construction and operation of a new manufacturing facility in Tamil Nadu.
"We appreciate DFC's assistance for our solar cell and module production facility in Tamil Nadu. It shows the trust and belief DFC has in Tata Power’s ability to set up a state-of-the-art manufacturing supply line in the country. This will go a long way in supporting the renewable and clean energy transition in the country.” said Praveer Sinha, managing director and chief executive officer, Tata Power.
At present green energy makes up 38% of Tata Power’s capacity. The company said in its release that it aims to up the figure to 70% by 2030.
Tata Power currently has a little over 7.8 GW renewable energy portfolio, of which a shade above 4.1GW is operational, while just under 3.7 GW is under construction. The company also has a 500MW solar cell module manufacturing facility operational in Bengaluru. The company’s operational portfolio comprises 3.2 GW of solar power and 993 MW wind.
