Till date, solar power projects are not-viable for SMEs as per the banks’ circulars: MSMEs

New Delhi, July 18 (KNN) The solar power projects which are highly in demand these days, have also become viable for the industry. But some of the public sector banks holding tightly onto their old circulars dating back to 2014 tend to be unsuitable to finance them for SMEs and other big industrial units as well.

Naveen Jain, Director, Dayachand Engineering Industries Pvt. Ltd, pointed that some of the banks, in their circulars, mention that these solar power projects are unviable because of high capital cost and non-availability of subsidy.

But as per the industry experts this is not the case today. Over the time, the costs of such projects have come down making it feasible for both SMEs and the large scale industries.

Today even without any subsidy some industrial units seem capable enough to finance them on their own via loanable funds available from the banks. But all this works only if the banks are ready to financially support industries on these lines.

Talking to KNN about the feasibility of the solar projects for MSME industry, Jain said, “Though currently on such projects there is no subsidy given by the government to the industry but our industry fortunately is willing to take over solar power project on its own.”

“The only problem is that financing for the same by the banks has been restricted by the circular released in 2014.  Today we don’t require any subsidy for this. All that we need is the bank support to provide us with adequate finances to initiate the projects coming our way,” Jain explained.

According to Jain, the approximate cost of installation of such a project is Rs. 60,000 per kilowatt. The total cost ultimately depends on the total capacity in Kilowatts to be put up by the industrialist. Thus, 75% of this cost needs to be financed by the banks and the remaining 25% of which needs to be the industry’s contribution.

“But the only cause of industry’s concern is that this 75% assistance is not available from the banks. Public Sector Banks are hesitating because of their own age-old guidelines .The circular of 2014 which is not revised till date is hurting industry’s enthusiasm to viably  take over and switch to solar power projects,” opined the expert.

All in all, in spite of the industry taking interest to try its hands on the solar energy, banks becoming the roadblocks would really hamper the sustainable transition and the solar power business.

Thus, a simple revision of the bank guidelines to finance solar projects for the industry and necessary attention in this regard is sure to turn the tables in favour of both industry and our environment, feel the experts. (KNN/ GK)